Question about re-financing home.?

I purchased a new home for $195,000 about almost 3 years ago. At the time I put 20 % down on the home and got a 30 year mortgage at 5.1 %. I would like to refinance the home at the newer rates of about 3-4% , However, the home went down in value even though I purchased it a time of low prices. If the home went down to about 170,000 in price , what will it mean for me to re-finance at the lower interest rate even though I lost on the value of the home? Should I re-finance now, wait till the home goes up in price, or is it better for the home to go to an even lower price? Thanks, from confused.
Category
Business & F

To qualify for the HARP program your loan had to be purchased by FNMA or FHLMC by May 2009 so you probably bought too late for that and will have to qualify with conventional financing. If you wait for the home to go up in price, chances are the rates won't be as low as they are now. If you pay two more years on your current loan, you will still need for the home to increase in value by more than 7% to avoid PMI on a refinance. It is also hard to imagine rates remaining this low for two more years. Here are the numbers available today: Your current P&I payment is $849.40. After three years your balance should be about $148,900. Adding $2700 for fees, financing $151,600 over the remaining 27 years at 3.50% results in a new P&I payment of $723.93, but you also add a PMI payment of $61.90 for the next 62 months until your balance falls below 78% of the current value of $170,000. You would break even on your fees after about 42 months, but after the PMI falls off your monthly savings will increase to $125.47. If you see yourself remaining in the home for at least 5 years, you should probably consider refinancing before rates inevitably head higher.

Source(s):

Licensed Loan Officer in Ohio