Refinancing Advice required?

If you can handle the extra payment, then I would say it's well worth it, even if your plans are to stay there only 5 years.. Your payoff will be much lower since you're paying more principal and less interest.. As far as the costs go, you should be able to choose a slightly higher interest rate and have the lender pay the costs for you.. If you're getting a quote from your existing lender or a local bank, then that's a problem... you should contact a LOCAL mortgage broker and apply with them. Not the local "Big" bank, and certainly not one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Perhaps. Because your loan did not close escrow before May 31, 2009, you do not fit the criteria for the new "Low cost" FHA streamline, the combination of your rate and the high cost of a regular streamline, coupled with the relatively short time you plan to be in this property probably makes refinancing under FHA a bad idea. If you have sufficient equity, it may make sense to refi into a conventional loan, but again, it depends. The larger your loan balance is, the more it may make sense. Either way, there will be closing costs, it just depends on how you pay for them. My advice is to connect with a local Mortgage Banker/Broker and have a comparison done using you specific scenario. Judge what makes the most sense, partly by determining how much you will save each month with each proposal, and how many months it takes you to break even. Only then will you know for sure. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com ~ 888-889-9950

If you have the equity, then conventional would be your best option.

Sounds like paying extra till you get to 78% ltv and then look into conventional refi