Need Help with Refinance Numbers
I'm looking to refinance my mortgage with the lowest up front costs and monthly payment possible. My job is scheduled to be off-shored at the end of this year, so I'm trying to lower my costs now in preparation for the worst. I'm currently looking at penfed 5/5 ARM but am unsure if it's the best choice for my situation. The 5/5 is locked for 5 years and adjusts once every 5 years with a max one time adjustment of 2% and lifetime of 5%. I probably will not stay here more than 10 and it will most likely be much less. I'm not sure of whether or not to pay points. Here are the numbers:
Current mortgage balance: 178k
Current home value: 240k
Current rate (30 year fixed): 6.25%
Monthly Payment: 1,115
Penfed 5/5 0 pts Rate: 4.625%
Estimated Cash at Closing: 441
Estimated Payment: 915
Penfed 5/5 0.5 pts Rate: 4.375%
Estimated Cash at Closing: 447
Estimated Payment: 889
I chose to roll my closing costs into the mortgage during the application process, I do not think that it is correctly taken into account in the 2nd estimate, so figure about 1k more needs to be rolled into the mortgage for the 2nd estimated payment. I'm not sure how much more per month this would work out to be... 1k/360 is < 3.00$ a month, so disregarding interest, this would be the best deal. Is this accurate?
From what I understand, the break even point on this will be about 2-3 months, so it seems like a no brainer right now. Am I missing anything? Does anyone have any experiences with the 5/5 mortgages? The closing costs look to be significantly lower than the 30 year fixed mortgages... no 1% origination fee.