Refinancing - your thoughts

DH and I bought our starter home (well starter apartment ) one year ago.

We are looking into refinancing to take advantage of the current low interest rates. We have a decent rate to begin with. We are doing this soley to save money, we are not in any risk of losing our home, and will only pursue this if it makes sense.

So it looks like it will reduce our payments by about $140 per month and take less than 2.5 years to breakeven. We plan to stay here a minimum of 5 more years. So we stand to make a minimum of $4,200.

Here is the question - our place will appraise for less than we bought it. If our loan amount exceeds 80% of value we will have to pay PMI and will wipe out any monthly savings.

We originally put 25% down, so we think the current value will be very very close to this 80% level.

Would you risk the $300 appraisal fee to see if the refinance would be worth it?

Re: Refinancing - your thoughts

yup. it can't hurt to know what your place is appraised at anyway...
i'd do it.

Re: Refinancing - your thoughts

I would say yes if you think you have a good chance of coming close to the value you need.

Re: Refinancing - your thoughts

It's so hard to know.

There is a VERY similar one for sale now listed at 7k above the amount we would need to be to avoid PMI.

But appraisals are based on what has sold, not what is listed. Also, not sure if these people would get close to listing or significantly below. It's been on the market about a month.

Re: Refinancing - your thoughts

Message edited 9/1/2011 7:11:21 PM.