I'm going to talk to a refinance officer tomorrow to see if it sounds like a good idea for my situation.
Unfortunately I don't have a ton of equity my home yet and I still have PMI. My original 30 year mortgage rate is 4.125%, and I have 27 years left. I do think my home value has increased a bit, and we just fenced in the back yard ($3600, paid for) and put in a new HVAC system ($9100, financed, about $8k left).
Ideally, I am hoping to get an interest rate at 3% or less on a new 30 year refinance AND get rid of PMI, but not sure if that will fly. My banker friend said it might be possible, perhaps with a slightly higher interest rate. It will depend on what that interest rate would be with or potentially without PMI, and what the closing costs are. I can afford to pay for some closing costs out of pocket as long as it's within reason. I'm hoping I can just use whatever my saving ends up being on my monthly payment as additional payment on the principal moving forward, so I'd pay it off sooner.
Based on my limited knowledge and initial rough estimates, I think my break even point is around 2.5-3.5 years. I do think I will be in this home for another 3 years minimum, but maybe not after 5 years. 10 years, probably not. But my salary is increasing and as I am paying off other debts I can begin to make extra payments on principal to get it paid down.