You should follow-up with your lender to find out what the procedures are to have the PMI removed. It's confusing to compare mortgages when points are involved. A point is equal to one percent of the loan amount. For example, the annual percentage rate was designed to make it easy to compare a mortgage at 8.3 percent and one point with one at 7.8 percent and three points. Unfortunately, APR calculations assume you will keep your mortgage for the full term.
Most people sell or refinance their home within six to twelve years.
So it makes sense to use different formulas, depending on how long you think you will keep the loan. The following chart will help you make an adjustment to the quoted APR, based upon the number of years you plan to hold your loan. To complete the comparison of multiple loans, you should also compare the other fees to be charged by the lender. Choose the points you have been quoted, and determine the adjustment factor based upon the number of years you plan to hold the mortgage. Perform the same procedure for other loan packages and compare the adjusted APR on each loan.