Sunday, September 19, 2010

Refinance?

So I called our Mortgage company.  Apparently they won't automatically cancel our PMI even though we have passed 80% LTV.  I called a couple times and they required we do an appraisal.  So this will cost us about $300-500 depending on who does it.

Without PMI, our mortgage at 5.5% would be 1098.  Add 200 for insurance and tax, and that means a monthly payment of about $1300.

Looking at our current situation, a refinance would reduce our monthly payment considerably but the closing costs are higher than I expected.

Okay, here's the breakdown from one loan officer:

A 177,000 loan for 30 years @ 4.375% would be: $883, plus $200 would be $1083, saving us about $220 a month.

A 177,000 loan for 15 years @ 3.8% would be: $1291, plus $200 would be $1491, an extra $200 a month but reducing the interest over the entire loan by about $75,000.

So, I'll let you know what we decide to do.  I'm also considering a cashout, but that depends on how much the house appraises for.

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