Refi Options - help me understand and choose please!
Right now we have $351000 left on our loan. Our rate is 6.49%, 30 year term, and monthly payment at $3300. We are trying to refinance to a 15 year term. We already pay additional $200 on the principle every month anyways so we are more than fine with paying more for a shorter term.
I received multiple loan estimates for refi, but I am trying to decide which lender to go with. Both are offering an interest rate of 6.25% for 15 years and giving a monthly payment of $3566.
Option A:
$3500 origination for broker compensation
$6200 total loan costs
$6300 total other costs
$8750 closing costs (including $3700 lender credit)
$7100 estimated cash to close
5.786% apr
48.3% TIP
Option B:
$0 origination
$4500 total loan costs
$6100 total other costs
$9800 closing costs (including $750 lender credit)
$8150 estimated cash to close
5.692% apr
48.5% TIP
Is option A better due to lower closing costs? I’m not sure if I’m overthinking things, but I just would like someone to explain to me which is the better option so I know I’m making the right decision.
Thank you!