Customer: your closing costs are too high!!!
TMP: how much?
Customer: $5,000 higher!!!
TMP: any other differences?
Customer: well, your rate is 4.125% and the other company is 4.500%. But….$5,000!!!!
TMP: I see. Luckily for all of us, there is math. Let’s do it!
Loan Amount = $220,000
Payment at 4.500% = $1,114.71 per month
Payment at 4.125% = $1,066.23 per month
Difference in payment = $48.48 per month
Times 360 months (30 year term) = $17,453.01
Math: pay $5000 today and save $17,453.01 more than the “zero closing cost” option.
Bottom line: letting your emotions get in the way of a financial decision like this can cost you. Maybe it’s not my closing costs that are high…eh Colorado?