I am working on refinancing the house.
I have about 5% equity and my interest rate is currently at 6.5%. The bank I am with told me they could go to 3.375% on a 15 year fixed, but I'd have to pay PMI, which I have a real problem with. If I did the 15 year through them it would cost me around 4k in PMI, which leads me to why I am here, I can't really find a better situation. I was wondering if anyone could suggest something I am missing to try to get around this. My bank is a local bank and at the time we purchased the house they did an 80%/20% over two loans to avoid the PMI. Our credit is excellent, over 750, so if anyone has any ideas I am all ears, or in this case eyes.
I don't have enough cash to bring the equity up to 20% at this time. Should I just pay the PMI upfront and call it a day? Or make the PMI payments for the 4 years it would take to get to 20% equity.