Help with evaluating a possible refinance 1 year into 30 year mortgage? : personalfinance

Hi there! I was wondering if you guys could help me understand if a refinance of my mortgage is a good idea right now. Here is what I discussed with my lender yesterday:

Current Loan

Starting Amount (July 2019): $496k

Interest Rate: 3.875%

Term: 30 year (360 months)

Monthly Payment (P&I): $2,332

New Loan Option

Starting Amount (July 2020): $489k

Interest Rate: 2.875%

Term: 30 year (360 months)

Monthly Payment (P&I): $2,029

Closing Cost: ~$7,000

NOTE: If we roll the closing cost into the new loan, it would be a monthly payment of $2,058 (P&I) (Loan amount $496k)

  • Can you help explain what numbers I should be looking at to determine a break even point? At this point, my husband and I plan to stay in the house at least 4 more years and hopefully longer but you never know with jobs, etc. We do like living here though (Denver area).

  • Also, I am leaning towards rolling the closing costs into the loan as we’d prefer to not spend $7k up front but would like to understand the repercussions of doing this or not.

  • Last, when I say closing costs, I am including the prepaids in that number. Also, our escrow is $462/mo.

Thanks in advance for your help!

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