Should I refinance or not?

I would at least look at a 5/1 conventional that would save some money right now. how long do you plan to be in the house? that would be a factor in going for a 30 year.

How much is owed on the property now?

Absolutely refinance the property and if you still want a low rate refinance into a 10 year fixed. Do not worry about your 2.75% rate that is what is says on your note but take into account the $612 a month and if you blend that into the current payment you're paying on 4.55% and your $612 is not being applied to reduce your balance. You did the right thing in taking advantage of 3.5% down FHA and leveraging the bank now refinance it into a conventional term and take a little cash out. $625,500 @ 4.375 (APR 4.375% ) 10/1 ARM Pmt: $3123 about $47 more than you current payment with PMI. Or $602,000 @ 4.25% (APR 4.25%) 10/1 Pmt: $2961.

I agree, refi now at 10 year fixed.

if your current 5/1 ARM is not interest only, then you're right - the net payment would be almost identical. (This assumes that you purchased the home with 10% down.) However, you'd secure your payment beyond the 5th year since all indications are that rates are likely to increase in the near term. By the time your ARM is set to adjust in 5 years, it will likely be at a higher payment. How much higher is anyone's guess. The other advantage is that your MI may not be deductible if you're a high income household whereas the interest paid on the fixed rate mortgage is deductible. Just a few considerations based on the information you provided. You can reach me at www.andylugohomeloans.com or 877-736-6367.

A refinance is likely a good decision. I would suggest you ask a Lender to do a detailed review of your options. This may not be a "black or white" decision and can not be answered without taking a full application. I suggest you get a referral to a lender that you will not pressure you into refinancing without complete information and a real benefit to you.

Even if interest rates are a little bit higher, you will likely save money by eliminating PMI. We are a California-based lender - feel free to give us a call to explore your options at no obligation. 858-605-0952.

Cara, One possibility that has not been mentioned here is for you to review your documents as to what the procedure might be for having the PMI removed from your current loan WITHOUT refinancing. I would be happy to review your documents to see if this is an option. If, and only if, this is not an option should you consider the refinancing options. Please make sure that you speak with an experienced lender who will lay out various options and intelligently discuss the pros and cons of each with you. I'm happy to help with the financing or just give you advice. If you need more information, or a competing rate quote call, email or use my live support button to discuss or get in touch with me. Web Address for live chat or quote is: http://www.loansfromrob.com/quote/ Email is robertlh66@verizon.net and direct phone is 240-752-7549. Good Luck -- Rob Hanson