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Should I refinance?

My current mortgage is at 5.875 with no PMI and I owe 490,000. My loan to value ratio has dropped over the past five years to over 90%. I have excellent credit, but also owe about 70,000 combined in college loans, line of credit and credit cards. I understand that to get a rate worth refinancing for, 4.875, I would only be eligible for an FHA loan. However this requires a PMI payment at closing of 8700 and then an additional 226 per month MPI, which I haven't had to pay in years. The net decrease in my payment would be about 150, so it looks like six years to pay off the cost of closing, plus the MPI. Is it worth it to refinance? by samcrow from Milwaukee, Wisconsin. Dec 15th 2009 Reply

Casey Moriarty (CaseyJon)
#5 ranked lender in Wisconsin - 4 contributions

First off, your loan amt would be a jumbo and therefore not eligible for FHA. I have several investors that offer jumbo loans at aggressive rates, and it may be possible to avoid PMI entirely. As to the question of is it worth it to refi, that would depend on the amount of savings vs the costs of the transaction, combined with what your personal goals for the property - how long are you going to stay in the house, is it important to you to pay off the loan quickly, or are you looking for some payment relief. I would be more than happy to discuss your situation and the options I could provide. I can be reached at 262-264-5462. Hope to hear from you! Casey

Dec 15th 2009
Tony Scott (Tony Scott)
#18 ranked lender in Florida - 3 contributions

What city, county and state are you located in? There isn't a lender in the country doing 90% financing on jumbo loans. My suggestion is to go below the conforming loan amount and add a home equity line to cover the difference. You'll get a great first mortgage rate with no PMI and a great line of credit rate lower than your first mortgage rate. You could possibly save $478 per month. Give me a call to discuss this further.Tony 321-278-0433

Dec 16th 2009
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