when is a mortgage too expensive?

[Nnena O.]

I paid cash for a duplex in Pittsburgh, then applied for a mortgage under the delayed financing exception that I learned about here on BP. I am trying to figure out if it is even worth it to go through with the mortgage.

Here are the numbers I received from the bank and I am wondering if this mortgage is too expensive for the size of it.

Appraised Value: $60,000

Mortgage of $42,000 (LTV=70%)

30 Yr. Fixed Conforming

5.00% with -.125 pts.

Closing costs are approximately $3,140

Thanks for your thoughts.

[Charlie Fitzgerald]

The loan size is what is not in your favor.  Have you talked to a small community bank or credit union or savings and loan?  Try them before you decide.  If you do not need the money for something that is going to return you more than the cost to get it...leave it alone.