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Worth Refinancing to get rid of PMI and lower interest rate?

I bought my first condo in March 2019 and am wondering if it is worth refinancing to get rid of PMI and get a better interest rate with the rates hovering so low. It was a brand new build and no one had lived here before me. It seems a bit odd to refinance after just a year of owning but getting a smaller monthly payment is definitely enticing. I see myself staying in this house for another 2-3 years and then would like to keep it as a rental property.

Facts:

Purchased in March 2019 for $389,000

Current amount left on the loan: $341,000

Current Monthly Payment: $2,032 (includes $52 PMI)

Interest Rate 4%

I know that a Zillow estimate absolutely is not the end all be all but the Zestimate has been hovering around $409,000. I am unsure what an appraiser would actually appraise it at as I have have zero experience with that. I have added things like brand new glass shower doors in both bathrooms, blinds throughout the condo, and a new washer and dryer. Not sure if those actually add to the value of the condo which did not come with any of those things when I bought it.

My mortgage broker said “If I am in your position I would not refinance until I have 20% equity to remove the mortgage insurance payment. It might take another year. To refinance & keep paying mortgage insurance does not make sense to me as you are likely going to have to refinance to get rid of the mortgage insurance later down the road. Do all at the same time & remove PMI & get a lower mortgage interest rate.

It is more important to reach 20% equity to remove PMI than lower your inter rate by 0.75%.

We never know what will happen with the mortgage interest rates. Let’s check back in Fall 2020 around Thanksgiving & the lead up to the Presidential election. Could be an interesting time for mortgage rates with election & Covid 19.”

Seems like sound advice, but I know y’all have great advice so I would love to hear your opinions as well!

submitted by /u/unyunpicka
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/gtq95h/worth_refinancing_to_get_rid_of_pmi_and_lower/
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