How To Tell If a Refinancing Is a Good Deal

Jessica Simpson's Marriage Advice
The multitalented JESSICA SIMPSON, who is constantly fighting those ever-pesky divorce rumors, opens up about her happy relationship with hubby NICK LACHEY and even offers advice on how to keep the wedded bliss!
"I think you have to always remember, and he has to remember, that you do need a compromise, even though it's hard," she says.
She admits though, that sometimes strong personalities can get in the way of marital negotiations! "There's people with pride involved," she says. "You have to back down sometime -- just a little bit."
One thing the couple must now agree on is a new house. "We're looking," she says of finding other digs. "We haven't found anything yet but we're shopping around. We live so far out, we want to live somewhere where we can have a really nice view."
And now that "Newlyweds" has ended they both want a house that strangers haven't already seen the inside of! "People won't know where our toilet is when they walk in the house!" she says.
Jessica was out in New York City introducing her new line of beauty products called Sweet Kisses, named after her first album and available at Wal-Mart in October. "It's such a great product," she says. "Everything tastes really good and it's all good quality, great flavors."
They include Vanilla Cupcake, Strawberry Sorbet and Créme Brulée. So which does Nick love the best? "His favorite is vanilla," she reveals. "I think most men like vanilla."
The 'Dukes of Hazzard' actress says she decided to create the fun product because she was able to be hands-on, rather than just be a face or name on the package. "I ended up wanting to be a part of Dessert [makeup] because I could actually smell all the formulas, test everything out," she says.
And she's getting a huge kick out of being a part of the process. "I love this business," she says. "I love being creative in different ways and I am a girly girl so I love products. You can never have enough!"

How To Tell If a Refinancing Is a Good Deal
You are not paying anything out of pocket because they are adding upfront costs to the balance. I know this because if the balance of the new loan was the same as the balance of the old one, the payment should decline by $258 rather than $245. The smaller payment difference indicates that the new loan balance is approximately $4500 more than your current balance.
In other words, you are paying $4500 for the lower rate. The fact that you are borrowing the $4500 rather than paying it out of pocket does not change this at all.
While this deal is not quite as good as it looks at first glance, it isn't a loser. My refinance calculator indicates that you come out ahead if you retain the new mortgage more than 42 months. But does coming out ahead make it a "good deal"?
You define it that way, which is exactly how the solicitor wants you to define it. Probably he paid good money to buy a list of mortgage borrowers with large balances and interest rates above 7%. This is a valuable list precisely because it is easy to demonstrate significant savings to the client, and make a substantial profit at the same time. If the applicant is focused solely on the monthly payment, you can make even more by rolling upfront fees into the balance.
The problem with defining a "good deal" in terms of the savings from a refinance is that such savings depend on the rate on the old loan as well as the rate and upfront charges being offered on the new one. By this definition, if your old loan had a rate of 8.75%, the deal offered would be even better! This makes no sense. Your focus should be on whether or not you could do better dealing elsewhere.
A "good deal" is a new loan that is priced as well or better than any other new loan that you can find in the current market. This is the same definition you would use if you were shopping for an automobile, a computer or a mousetrap.
Using this definition, I don't know whether your deal is a good one or not. I don't know your credit score, how much equity you have in your property, whether it is your permanent residence, or what type of property it is. All these factors and more are relevant to what you could find in the marketplace if you shopped other loan providers. Until you do, you don't know whether you have a good deal, either.