Refinance with LMPI and HARP - is this too good to be true.....

Hi,After coming across this site and hearing people's story with LPMI and HARP, I felt compelled to share my experiences thus far with attempting to refinance my existing 30 year mortgage with LPMI. I live in IL. The existing 30 yr mortgage with PNC started at $301,000 on a 5.625% (included LPMI) with no escrow and a maturity date of 3/2038. Balance on loan is ~$280,000 and approx value is pegged at $231,000 Wife and I have stellar credit (800+) and solid work history. For the last 2-3 years I've attempted to approach the loan officer who got us our existing loan and ask for options (she helped us get first home loan too in 2002). I've been told time and time again to leave our loan as is since we don't escrow. She said any new loans will require escrow and the benefit of the lower rate will be offset by the PMI we would pay. So, I trusted her. She basically said the next time it would make sense for our paths to cross is when we need to go into a 15 year loan.Fast forward to this past December. Wife and I applied for a refinance with a broker and faced the same problems most of you have all faced. The damn PMI certificate transfer and a general afraid to approach it mentality. It took well over 3-4 weeks for the transfer to occur. This past week after all the dust settled, we were presented with an offer of a 30 yr fixed at 4.5% and escrow. Not too appealing if you ask me. Extend the loan by 5 years and give up escrow. I've never liked to escrow and don't feel like people with credit scores well into 800's should. And let alone people who have a proven history of paying taxes/insurance on time with no escrow. So, I had them re-work the numbers. We were then presented with an offer of 4.125% on a 20 yr with no escrow. Much more appealing to me. So, I'm looking for your all opinions here. We locked in the rate and we plan on moving ahead. The way I see it is we knocked off 5 years of our existing mortgage, saved $13 all for approx $400 in fees. Note, we didn't even do an appraisal since it would most likely come back to the automated figure of $231,000. The other new offer was 4.25% on a 30 yr loan. While that scenario would have saved us ~$320, it wouldn't get us out of debt quicker. And the savings of $320 a month on a dual income family is not much on a monthly level. Since we aren't pressed for cash, are we making the right move? I've been looking online at public documents for my county as well, and it seems most people who have refinanced in the past 2 years have moved to 30 year loans. We moved in 2006, this new loan matures in 2033, less than an original 30 yr loan. If my math is correct, some neighbors will be paying for their home for 42 years or so. Ouch.Thanks. by kaplan_216_126 from Chicago, Illinois. Feb 25th 2013 Reply