May have goofed
We are pursuing a refinance of our house. We were going with the bank that holds our current mortgage because we initially thought that we could do a streamlined refi with no closing costs but it turns out because our first and second give us only 10% equity, we would have to refinance the 2 into 1 and thus start paying PMI. The rates had dropped that day so we went ahead and locked. I have not turned in the completed loan application yet, I planned to get that in by tomorrow.
We ran the numbers today and it became apparent that a VA loan would probably be a better option. The funding fee on it would be a little less than $4,000 where as PMI would be $174. Assuming no great appreciation in value, we would not hit the 80% mark for another 7 years (84 months x $174 =14616). VA saves us over $10,000.
Should I just call the lender and say forget it for now? How can I handle this graciously?