TexasBlues wrote:
Your old escrow gets returned (guessing $2000)
Skipping 2 payments(guessing $3000 total)
That's not saving money because you need a new escrow and you're going to have to pay the money eventually, so skipping two payments doesn't save you anything, in fact it could cost you because you're still racking up interest on principal during those two months.
You need to check out a refinancing calculator like this one http://www.bankrate.com/brm/calc_vml/refi/refi.asp. The important thing to figure out is not how much you'll save a month, but how long it will take you to recoup the refinancing fees. Then you need to figure out if you'll be in your current house that long.
Agreeance it's not how much you save per month. You should be comparing the total interest due on the before and after amortization tables assuming the principal amount is the same. Typically the principal amount of the refi loan goes up because in addition to fees, banks roll in any other debt outstanding depending on the borrower profile.
