I Want To Refinance, but Should I?

Mortgage rates have hit another low, 4.75% or there about. My current mortgage rate is 5.85% and my credit is very good (caveat...I have not checked it recently). Sounds like a no brainer right, well, not so much. Here's the problem, lenders are requiring 20% LTV (loan to value) ratios now and I'm not sure what the value of my home is today. During the mortgage heyday, I was able to get a conventional loan with no PMI and a much smaller down payment than 20%. I must also tell you that I purchased a home in a price range that was wayyyy lower than what the mortgage brokers were willing to give me, like $75K - $100K lower. Whew, glad I dodged that bullet!

Since my mortgage is pretty small, the savings on a 1% interest rate reduction will yield about $110 a month. On the one hand, if I can get a loan with no PMI and not subject myself to "creative financing," then maybe refinancing would be worth it. On the other hand, if I can get the rate reduction but am forced to plunk down a huge principal payment or obtain PMI, then the refinance will not be worth it for me.

This season of historic mortgage rate drops may be one where I have to be a spectator and not a participator. Or as it's said in the south, what's good for the goose may not be good for the gander (1. I'm certain it's said in other regions but I'm a southern girl born and bred and 2. I know it's also quoted as what's good for the goose is also good for the gander ... just thought I'd clear that up;-).

Have a great weekend everyone,