Could you please give me some advice on a refinance of my mortgage? Details…?

I bought my home 14 months ago, it was a foreclosure, and we got a heck of a deal. It appraises at about $ 160,000 or $ 165,000 right now, and we paid $ 142,000 for it.

Since it has only been 14 months, the principal is still at about $ 140,300. BUT…we are paying like $ 133 a month for PMI (Property Mortgage Insurance) since we don’t have enough equity in the home at this point. We are also paying an interest rate of 6.75%. I really don’t know how that compares to other people…but I didn’t think it was all that great.

So…..I was just calling around to a few different mortgage companies, and not hearing anything real intriguing until last Friday. I talked to a guy who said he could lower my mortgage payment by $ 60 a month, lower the interest rate to 6.35%, pay off $ 3000 worth of my student loans (which equates to about a $ 75 monthly savings), and we would get to skip 2 mortgage payments. Skipping those 2 mortgage payments would then allow me to pay off a laptop lease I have, which would save approximatley $ 90 per month. I would then have about $ 1500-2000 cash left (from skipping the 2nd month of mortage payment, and getting the remaining balance of my current escrow account), and I could save that, or pay another small student loan off. So…in the end, we could likely knock out close to $ 300 of monthly expenses, and have 3-4 less bills to send off every month. I really like that idea.

He told me all of this, and I was pretty excited……UNTIL I saw that our new loan amount would be $ 152,000…. It’s still under what the home appraises for, but I just kinda hate seeing it jump to over $ 150,000…

I’m not sure how long we will be in this home, but I would guess at the VERY minimum, 5 more years, but who knows, we could be there for another 25. We haven’t really put much thought into it.

Can anyone lend some advice on this? I would appreciate hearing another opinion.

ps- It would be refinancing a 30 year fixed, to another 30 year fixed. And I am 25 years old. Just throwing that out there.

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