- advertisement - Ask Dr. Don  Financing closing costs  Dear Dr.
Don, I would like to refinance my home. What are your thoughts
about rolling the closing costs into the loan amount? Does it
make sense to pay for those costs over the life of the mortgage?
Andrew Amortization  Dear Andrew, Rolling the closing costs into
the loan amount on your refinancing isn't a bad thing -- as long
as that is your intention. Mortgage lenders that advertise no
closing costs really mean no cash paid by the homeowner at
closing, other than money from the proceeds of the loan.  If you
don't plan on staying in the house very long, then you really
need to consider these costs when you decide whether refinancing
makes sense. If you add $3,000 in closing costs to a loan
balance of $100,000 and your monthly payment goes down by $50 a
month, you need to stay in the house for about five years to
recoup your closing costs.  As you'd expect, and shown in the
example below, the monthly payment is higher when you finance
the closing costs.