$5,200 to save 0.25%?

[Nick Dillaha]

Hello BP!

I'll try to make this short. My wife's parents invested in her name over 14 years ago and destroyed her credit with 2 foreclosures and a bankruptcy. It's now off her credit but our local credit union whom her parents had a mortgage with wants $5,200 to become a member again. I'm currently refinancing our rental property through them and am looking to refinancing my primary residence. My wife isn't on the rental property but is on our primary residence. The interest rate is .25% (3.5%) lower and we would also save $150/month in PMI making our total savings of $354/month on a 30yr fixed. We currently have a 4.25% with $212/month in PMI. We wanted some advice on whether or not we should pay off the $5,200 to be able to refinance through this credit union. With $4200+ year savings it sounds like the right decision. Because she is on the loan we can't refinance with this credit union without paying the balance off. Any suggestions?

[Joel Johnson]

Find a different lender? Can't imagine having to pay a fee to become a member of a credit union, and that rate is competitive but doesn't seem special. I would definitely do some shopping on the rate rather than pay to become a member. If for some reason you can't go get the mortgage through someone else, you break even in 15 months, so as long as you stay in the home that long I would do it. Again though, best idea, find a different mortgage lender.