Nobody should ever have a drop of 20% in their payment.
unless your rate dropped 1%-2% which would mean that you should have refinanced multiple times all the way down.
Your $6000 a year savings doesn’t sound right.[/quote]
I refinanced just once from a $380,000 4% loan to a $340,000 3.375% loan. The first loan had PMI, the second did not.
[quote=HLS]What if rates go up ?[/quote]
What if, what if, what if?
The fact is he has a place he wants to buy, and only has 5% for a down payment. He’s not going to get a good mortgage with 5% down and likely imperfect but not bad credit scores.
He should pay down the imperfect mortgage he can get and save as fast as possible until he hits 20% and then he can get a good one. Right now people are getting 3.25% mortgages with no PMI. Rates could go up a 0.75% and he’d still be best off paying down the mortgage as fast as possible and removing PMI.
