Even without 20% equity you may qualify for a refi without mortgage insurance. If you don’t qualify for a lower rate without MI then additional cash is an option. Equity is only one part of being able to refi.
If you have the cash to get yourself into a better loan and plan on staying there regardless of market conditions and have the ability to save tens of thousands of dollars by doing so why would you hesitate ?
If the house drops in value but you are staying there for 15-20 years anyway, why waste tens of thousands of dollars in interest if you can avoid it ?
It depends on the value today and how much cash you will need but when you figure out the guaranteed return on the investment the guaranteed return will be incredible.
1. If you stay in the loan you are in you are definitely wasting money every month,
2. By putting more cash in you will have a much lower payment guaranteed and recoup the savings over a defined period of time.
If you don’t qualify to refi then you are like millions of others who are just stuck in a high rate with no options. Foreclosure and/or selling are options if they cannot afford their payments.
There are not too many things that are guaranteed today.. HLS
