I know we have a ton of smart folks here. I have a mortgage refinancing math problem that needs your validation.
Details below.

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Normally PMI is required based on how much of the home’s purchase price you financed so refinancing wouldn’t normally eliminate PMI unless you’re bringing additional capital to the table (ie paying down the mortgage principal) as part of the refinancing. Is that what you’re doing? Otherwise why do you expect PMI to go away?

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Currently the loan rate is 4.5%, 30yr conventional, PMI $147 monthly.
The proposed new rate is 4%. The cost of refinancing is $3633. If I tuck the cost into the loan, the total cost of additional interest would be $2528. The new rate will lower the monthly interest cost and get rid of the PMI. The total monthly saving would be about $260. If I pay the refinancing cost upfront, the breakeven is on the 14th month. Felt like it's a good move to do the refinancing. Is there anything critical that I've missed? Is the refinancing cost negotiable with the broker?

Do you plan on paying it off before month 14? Otherwise ask the bank for all fees associated (there will be some, think inspection, title search, etc... we just did this too), roll it all up and see what the true break even point is. Once you see the month, the only question is do you plan to pay it off before then.

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