Mortgage Rate Refinance No PMI

by Andy

Ask Kate: Mortgage Rate Refinance But No PMI What would you do? Lower your mortgage rate 1.5 percent to 4.6 percent and pay PMI or walk away from the refinance? Read the strategy of a homeowner who decides private mortgage insurance (PMI) is not an option. --Kate

Andy's Refinance And PMI Story

Hi Kate! I want to refinance early in the mortgage but I am not paying PMI! I bought my house in Sept 2007 with an interest rate of 6.275 percent and am looking at refinancing at 4.6 percent currently.

The problem is that I've had my mortgage for so short that hardly any of the principle is paid off. I did put 20 percent down but if I wrap up all the closing costs into the new loan it would put the amount of the mortgage over 80 percent value of the home, at the current assessed value.

It should be fun (not!) but I'm going to try to get the home appraised at a higher value so the balance of the existing loan plus the closing costs will be below 80 percent of the value of the home.

Otherwise, at this time it is not worth it to me to shell out the $4000 in closing costs to keep the new mortgage below 80 percent of the value to avoid private mortgage insurance.

I could lose my $350 in good faith deposit to my bank if I get to the appraisal stage, that far into the process. The gamble will be hard to pass up since over the life of the loan we're talking tens of thousands of dollars in savings!

Thanks for listening, Andy

Kate Answers: Mortgage Rate Refinance No PMI

Hi Andy, I applaud you for taking the time to think critically about a mortgage rate refinance and decide if it is the best move for you.

Lowering your mortgage rate 1.5 percent is tempting but I certainly understand why $4000 coming out of your pocket for closing costs just to avoid PMI may not be desirable.

Especially since you originally put down 20 percent!

Here is my home mortgage payment calculator. Use it to calculate different mortgage payments and see if there could be other ways to save money.

I hope you'll come back to Get-Your-Best-Mortgage-Rate again in the future. Let us all know how your appraisal strategy works out and if you ended up moving forward with the refinance.

Remember to bookmark Get Your Best Mortgage Rate to your favorites and visit often for up to date tips for buying a house and refinance advice. You can also invite friends to comment on this page or create a page of their own like you did.

Best Wishes,

Ask Kate how to get the best mortgage rates
Ask Kate

Finally! PMI Answers You Need

What Is PMI - Could private mortgage insurance be your solution to equity and down payment problems? 2013 Update: Deductible mortgage insurance premiums.

Updates on HARP 2.0 Refinance with Borrower and Lender Paid Mortgage Insurance - PMI and LPMI.

Could you be entitled to a mortgage insurance refund from FHA?

How do lenders calculate PMI? Credit history, amount of down payment or equity, occupancy status, and loan type factors.

How Do I Cancel PMI Will refinancing or a new appraisal be required?

What to do if PMI Decision Making is getting in the way of refinancing or buying a house.

My name is Kate and I will be your guide - PMI Questions and Answers

Return from Mortgage Rate Refinance No PMI to Get-Your-Best-Mortgage-Rate

Click here to add a comment.

You can also ask Kate about your mortgage at Best Mortgage Advice Social Networking Hotline.

The information you obtain at this site is not, nor is it intended to be, a substitute for personalized professional advice. All numbers are estimated and are for illustrative purposes. Rates, loan programs, and guidelines are published for convenience only, vary with no advance warning, are not guaranteed, and should not be relied upon. You are encouraged to consult a lender for a current rate quote and seek advice from qualified professionals, for example, attorneys, accountants, financial planners, housing counselors, mortgage lenders, and/or real estate agents, regarding your individual situation. Comments and opinions found here are not necessarily those of and its owners.

Focus on Finance

Insider mortgage secrets, every Thursday morning. Sign up now.

Focus on Finance brings you insider mortgage secrets.

Delivered by Super Kate who respects your email privacy.

Ask Kate

Borrow a mortgage insider's brain.

Ask Kate a mortgage question.

Ask Kate for Answers

Mortgage Blog

Mortgage news, interest rate updates, loan approval tips.

The Unparalleled Best Mortgage Rate Blog.

Follow Kate's unparalleled Best Mortgage Rate Blog

Search My Site

Search my site by entering Ask Kate and a term into your browser's search box. So for the scoop on refinancing, search for Ask Kate Refinance. Try it!