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?

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