“Find an option with no upfront costs, and see how it washes out. Your current mortgage holder should be willing to do a low-doc refi, since they already have most of the documentation. It’ll raise the rate somewhat, but you won’t have any sunk costs to recoup. This is all assuming you have at least 20% equity in the property, by a current evaluation.”
I talked with the current lender. They have my payment history and all docs. The loan agent didn’t seem to be in a hurry to sell a loan, nor negotiate. I told him the costs bothered me and I’d shop around, he seemed to not be concerned.
Conservatively I have $90k equity in the home, probably a bit more. I bought it for $192k four years ago, and have put over $30k in it.
If your current lender is not interested in a low or no upfront cost refi, it may be that they’re heavily relying on the fees to make a profit. Regardless, if they’re not willing to do it, then they’re not.
Go look around on bankrate.com. I recall a 15 year at 4.75% from last week. Some of them have fees that are considerably lower than what you quoted.
You have very healthy equity in the property. Is it in a market with heavy downside pressure on resale value of late, moderate declines, or reasonably stable? If you’re in a former bubble area, I’ve heard of 30% equity required for refi, on a current appraisal.
Shop around. Loan agents are like anyone else--some are more agreeable and hungry than others. I'd take my time, as rates may well go lower. If you do decide to refi, just make sure it's a fixed rate. I also like the idea of extra principal payments