Home Savings of America
Net Tangible Benefit Worksheet
DU Refi Plus and VA IRRRLs
For the refinance of an existing loan, there must be a net tangible benefit to the borrower. The following
indicates the benefit to the borrower(s) for this transaction.
A. Alternative Financial Benefit to Borrower
Loan term shortened (e.g. from 30 year to 15 year term)
ARM to fixed rate
Balloon to fixed rate
B. Points and Settlement Fees Recoup
1. Total Discount Points (financed or paid in cash) $ 6,000.00
Total Closing Costs* + $ 5,900.00
Total Cost to Refinance (New Loan) = $ 11,900.00 (A)
2. P&I on Existing First Lien $ 765.00
Monthly MI on Existing Lien + $ 35.00
Total first lien P&I of existing Loan = $ 800.00 (B)
3. P&I on New First Lien $ 600.00
Monthly MI on New Lien + $ 50.00
Total P&I of New Loan = $ 650.00 (C)
4. Total P&I with MI (if applicable) of Current Liens (B) $ 800.00
Total P&I with MI (if applicable) of New Liens (C) - $ 650.00
Monthly Savings = $ 150.00 (D)
5. Total Cost to Refinance (New Loan) (A) $ 11,900.00
divided by Monthly Savings (D) / $ 150.00
Total Number of Months
To Recoup Refinance
Costs = $ 79.33 (E)
(E) Maximum 60 months (84 on VA loans)
* Closing costs…
Closing costs are the total costs paid by the borrower to obtain the loan, including lender/broker charges
as well as prepaids, interim interest and third party settlement service fees.
… Do not include YSP.
… Does include the VA Funding Fee, if applicable
… Does include upfront or single premium PMI fee, if any.
… Does include any Prepayment Penalty on existing lien.