Closing costs sound too high? They could be in more ways than one.

Bankrate.com has a great column that answers questions from borrowers and those just shopping around for a mortgage. Dr. Dan Taylor is one of the experts on the Bankrate.com panel. Here's a recent question-

I am halfway to paying off my mortgage. It is a 15-year 5.5 percent fixed-rate mortgage obtained in 2004 for the amount of $90,000. It has an outstanding balance of $47,000, and the monthly payment, including interest, principal and escrow, is $800. I would like to lower the monthly payment. I tried to refinance with a lender, but the estimated closing cost was almost $5,000, so I didn't go with the refinance.

Closing costs are not the only consideration in this type of transaction. Where are the cost savings going to bring you when you are, in effect, extending your mortgage by 7-8 years.

I can understand your reluctance to pay $5,000 in closing costs to refinance a $90,000 loan balance. Bankrate's national average for closing costs in its 2011 Closing Cost Survey is $4,070, although the survey results were for a $200,000 purchase mortgage, not a $90,000 refinancing. While your closing-cost estimate is high, it may be reasonable for your part of the country.

If you're halfway done on your original 15-year mortgage, refinancing into a new 15-year mortgage will cost you money, even with the lower interest rate, because you're extending your existing 7.5-year mortgage into a new 15-year mortgage.

 A lot to consider, isn't there?  Real the full article.

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