QUESTION: Phil was offered a deal to refinance his home. He gives Dave the details, but it doesn’t sound like a very good deal.

ANSWER: You don’t need to refinance with those numbers. You’d be going up more in terms of interest rate than you’d save with no PMI. The only reason the payment is going down is that you’d be agreeing to stay in debt longer.

If you could’ve lost some of that interest rate, and gotten rid of the PMI, that might have come close to making sense. But, even that might not have worked in the end, because you’d have closing costs associated with the deal. You’d essentially be going up a full percentage point in terms of interest, and all you’d really be doing is resetting, or re-casting, the loan.