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shell111405 · Joined: 15 Jul 2010 Posts: 3 2.10 Dollars($)

Experts please help

I currently have 2 mortgages, which were taken out at the same time in Feb07 to purchase my house, primary residence in TX

1st mortgage: $224k (6.25%) - 30-year fixed rate

2nd mortgage: $52k (8%) - 15-year fixed rate balloon

I am in the process of refinancing by combining both mortgages into a new one for which I have been quoted at 3.875% for $283k ($276k in mortgages balance, $2.5k in TOTAL refinancing/closing cost, $4.5k in prepaid property tax & home insurance). I bought the house in 2007 for $295.5k. For refinancing, lender appraised the house for $315k. PMI is going to be approximately $102/month for 26-28 months. The underwriter has almost finished with reviewing my file and should have no problem approving the loan (according to my mortgage broker)

Assuming that I will stay in the house until it is paid off, here are some questions for you:

+ My mortgage broker actually thought that I would be better off with refinancing both of my current mortgages individually (80% loan @ 3.875% and the rest for 8.5%) instead of combining them into one. He said by doing that I will be able to avoid PMI and escrow. I sort of see his logic but still think combining the mortgages is a better option for me in the long run. What do you guys think?

+ How do I shop around for PMI to make sure my $102/month for the next 26-28 months is a competitive rate?

+ Any thoughts or comments on my refinancing?

Thank you so much

gmakerley · Posted: Fri Jul 16, 2010 9:56 am Post subject:

First of all, PMI rates are virtually the same across the board; and you won't have an option of "shopping around," as it's the lender who chooses the MI company. That depends on what company(ies) the lender may have a contract with.

I share your thought insofar as consolidating the two mortgages. Continuing to pay the higher rate isn't necessarily going to do you any good, and you would still have the balloon stipulation at the end of the 15 years.

I gather your plan is to remain in this home for a lengthy period of time. That would cement the decision for me, if I were in your shoes, I believe.

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Refinance 2 mortgages -combining 2 into 1 or do individually

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