Just about to lock in a rate with the online lender AIMloan, I raised a concern about appraising high enough to roll costs in. The broker checked another home value site, Eppraisal.com, and instead of $550K like Zillow now estimates, they valued our place at $474K. Well, even if we paid all closing costs, we'd need it to appraise for at least $503,750 to get rid of mortgage insurance.

The guy then checked what mortgage insurance rates were, to see if I could get a better deal (and one that wouldn't last the life of the loan), but quickly realized that since I have a 2-unit property, private mortgage insurance isn't an option. No, I can only refi to a private lender if I have the 20% equity.

He suggested I check with a realtor, so I did. Our real estate agent who sold our condo for us got back to me with comp sales in our area. Nothing is exactly comparable and there aren't many sales of places even sort of similar to ours in our area. But the ones she found ranged from $440K to $600K.

I'm still waiting for her to email the comps, but from what I remember, removing those two outliers, most places sold for low $500s. But that low outlier is out there, and it's a more recent sale. So she didn't know what to advise. She said it looked like the $600K place was really updated. Our place has some updated appliances and such but it's far from done; there are lots of shabby worn-out things like the main-level floors, clawfoot tub on main floor, plastic-based patched-up shower tray upstairs, partly finished basement bathroom.

Meanwhile, the ranty broker checked in with me via email, and I gave him the estimates I'd gotten from AIMloan but told him about the appraisal fears. He wrote back, much more conciliatory in tone, that he agreed I should be more sure of value before I try, and that the AIM estimates were now close enough to his prices that he'd like a chance to beat them if we did decide to refi down the road. I'll definitely give him a chance now that he seems interested in competing, although I also like AIMloan so far too.

So, it is what it is. After all this work, I've only managed to lower our property insurance by about $24 per month. I called our lender and they're going to do an escrow analysis so hopefully our monthly mortgage payment will be a bit less soon.

I noticed when I was doing this research something about a prepayment penalty on our current mortgage. I asked the lender about that while I was on the phone with them, and they said it was only if I paid off the mortgage within three years without requesting a payoff amount or something. So small extra principal payments should be fine.

I wanted to check on that in case I want to start paying down the principal to get closer to feeling comfortable about the equity we need. It's just a thought that occurred to me; I haven't really considered the idea in depth and we don't have a ton of extra money floating around in the budget this year.

EDIT:
Got the comps from the realtor. Clearly can't trust Zillow or eppraisal's estimates, and the few sort-of-like-ours homes aren't selling for anywhere near $550K.

Examples:
3,710 square feet, 6 bed 2 bath, built 1927
Eppraisal $489,024
Zillow $509818
Sold $480,000 in January 2016

4,222 square feet, 7 bed 4 bath, built 1900
Eppraisal $568,276
Zillow $526,357
Sold $475,000 in May 2016

Ours:
4,068 square feet, 7 bed 4 bath, built 1913
Eppraisal $474,269
Zillow $550,501

So yeah, definitely prudent to wait!