I imagine the "2,200 in closing costs" are the lender-only fees. You will also have city/county tax stamps/recording fees, the appraisal, title/settlement agent, title insurance (a policy re-issue is best) and some misc. fees. And you'll have the prepaids for your new escrow account.
My wife and I are going through the same thing and the interest rates are close to yours (current 15-year loan gotten in 2011 at 3.5% and we are locked at 2.625% on another 15 year refinance loan). For our loan of $174,000 the Good Faith Estimate came in at a little over $5000 in closing costs. About $2000 was for the escrow. The only reason we are refinancing (and economically it almost makes no difference if we do or not) is to shorten our mortgage by about 3 months while keeping the payment the same. We pay an extra $150 in principle each month on the current mortgage, but on the new mortgage will pay about $225 in extra principle each month, but the payment will be the same since the new loan has a lower p and I amounts.
So for you, if cash is tight, I would strongly consider not refinancing. I am all for maxing out the 401ks over getting the house paid off earlier.
Also, refinancing is a hassle. We have credit scores of 800+ each, $650,000 in retirement accounts, $100,000 liquid assets (stocks), make $200,000/year, our house appraised for two times the applied for refinance, and we have absolutely no debt except for the current mortgage. Guess what? The company we made a loan application with has asked us on five different occasions for the most minute and detailed documentation as to every single aspect of out finances. The biggest hassle is a $2000 "revolving" over draft protection with our bank (which we never use due to high checking account balances) and the loan is not moving forward because we can not locate the contract for the line of credit stating it is unsecured. The bank said so, but the mortgage company needs to see the contract. We are about ready to walk because of this. Just be prepared for a big hassle if you go through with it. Amerisave is the company and we refinanced with them in 2011. It is much worse the second time around.
Buckstar wrote, "I just started a refi with Cashcall 2.5% 15 year, no closing costs. Might want to try them"
I've always wondered about the "no closing cost loans" does this mean no lender costs only, and not the required county/city tax stamps and appraisal fee? Those costs still must be factored in when deciding whether or not to refinance. Or are there lender costs and the other costs associated with refinancing rolled into the loan, so the APR will be higher? We noticed this on the "Truth and lending statement we got from Amerisave (APR was higher than the advertised rate).