Is it Worth it to Refinance with PMI?

I’m refinancing *again*. Is it worth it? Yes! The rates are variable right now, but I’m locking in less than 3.5% on a 30 year mortgage. The hardship of my story is that when I had my home value appraised – and forked over $500 out of pocket to do so – it came in $45,000 less than what we had it appraised for in the past! We are now considered at much higher than the 80% loan to value ratio required for most mortgages without having to pay Private Mortage Insurance PMI.

Now, I know this is actually a better story than some have it in America. Some owe more than their values, many have foreclosed. So, I am still quite thankful and fortunate in that regard. In fact, the reason my value came in so low is because of a foreclosure next to my house. Another house across from me sold for about the same as what my house should be worth, not long ago.

Either way I look at it, even though I have to now pay a .65% PMI (grr!) fee, I still save nearly $150/mo by refinancing. I have considered refinance options every year for the last 6 years, and gone through with it many times. I have done a negative point each time so I don’t really lose my in the transaction, and I usually lower my bills by at least a few hundred a month, with more going towards principal. I keep telling myself, interest rates can’t possibly get any lower than this, so I should get that low rate, but sometimes I think I should have been wiser to just do a 5 year arm a few years ago and now have to refinance all of the time.

We would like to move, but don’t find it financially viable these days. So, either we could rent our home out or live here until the world looks a lot better. We will see, until that day I’m cracking out a few new cans of paint to keep making this place my home.

It may be worth looking into, if you haven’t refinanced in a while and are willing to risk the hit that a appraisal will set you back, to see if you can still save with lower rates than a few years back, even if paying PMI.

Obama has done a few things that have been useful in 2009 for homeowners. Keep your ears open for what happens with Obama and the re-election around making mortgages and home ownership more possible for the millions of people in America stuck or going under trying to pay off this huge ‘asset’ of debt so that they can have a roof over their head.

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