[Rick Lee]

Figure out the cost of PMI over five yrs. and compare to cash needed to reduce loan balance by enough to not need PMI. Also look into lender-funded PMI. A lot of them offer this by either adding something to the rate or rolling the upfront premium into the new loan balance. That obviously means you're paying PMI for the life of the loan, but can always refi out of it when the appraisal allows. My folks just bought my sister a house for cash, so she could move and get her other house ready for sale. As soon as old house sold and she had it off her credit report, she took out a loan on the new house to pay our folks back. The bank didn't care how long she had owned it, just that it appraised and that she qualified for the mortgage. Some banks will require "loan seasoning" in order to refi. I don't think it's ever more than 12 mos.