To Refi or Not to Refi

[Chris G.]

Hey everyone!

Here's the deal. I have looked all over and crunched the numbers and wanted to see what the overall consensus is on a FHA to Conventional loan to get PMI removed. Since I put less than the required amount to get PMI dropped off, the only option is to refi into a Conventional. I know all this is subject to an actual Mortgage rate and appraisal, yet, here we go...

Property was bought in Sept of 2015 in Southern California and is house-hacked with two of the 4 bedrooms rented out as I live in the master. That brings in $1100 per month.

Current loan: $188,000 / Owed: $181,000 / Monthly payment is: $1340 / Although I pay into it $1500

Originated 07/2017 / Rate 3.75% / PMI = $122 / Credit 740+ / Previous Appraisal $197,000 / Current Comps $220,000

I ran the whole "Should I refi equation"

(Old Rate – New Rate) /12 x Amount Owed / 100 = Monthly Savings

And figuring a New Rate of 4.25 I got about -$75. If I did refi and drop PMI ($122) would that go against the -$75? Therefore even though it is a higher rate I would actually be saving roughly $50 per month.

Let me know what you guys think!

- Chris