Nick, it will take you several years to make up for your closing costs as well as the other associated costs... This needs to be accounted for in your cost/benefit analysis...
The interest differential is just over a percent or so... depending on Credit..
It also depends on how much if any you pay over your required mortgage payment.. The larger the payment you pay the less it will be worth it for you... I have a buddy who bought a 200,000$ house at 6% interest. he has no desire to re-finance, it's not worth it for him.. He and his wife pay twice the scheduled payment, which means they will not be paying that much interest anyhow....
So, are you making the minimum payment; or are you guys making extra payments? If you are making an extra payment, how much extra?
As far as a 15 year loan like the others have stated. I would personally NOT recommend this.. I would recommend a 30 year fixed mortgage, while making payments that would correlate to a 15 year mortgage. This way if there are any future financial troubles, one can reduce the payment by 1/2 and not "get in trouble with the mortgage company". However, if you get a 15 year mortgage you're locked into a larger payment....
Bottom line..... Nick, if you pay extra then it will be less worth it for you to re-finance. The larger the extra payment becomes, the less benefit you will realize.
Also, keep in mind, if you make 1 extra payment a year on your mortgage that will have a very significan impact on the over all interest paid... So, you are able to make just 1 extra payment a year you very well may be at the same point that you would after having refinanced...
Also, giving the mortgage companies even more cash (closing costs), if you were to put the re-finance fees as well as appraisal costs into your current principal you may be ahead over all... A lot of mortgage brokers want to get people to re-finance... That's a pretty good source of revenue for them~~
So, i think it would not be worth it for you.. There are to many other ways for you to get ahead given your situation, and having only closed 1 year ago.
I hope this helps Nick...
