First time homebuyer here. We've found a townhouse, and had an offer accepted just last night.

We have a loan approval already with the lender my wife's parents used for their house. From everything I've read here and elsewhere, credit unions are supposed to have some of the best offers, so I already have my car loan with a certain CU, and wanted to see what they could offer for a home loan.

I've gotten through their application enough to see the rates/fees, and I'm not really sure what to think. I've read through the details on the various terms of the loans, and from what I can tell none seem to better than what I already have? But I'm not sure if I'm missing something.

• House is 225k, we are looking to do 3-3.5% down (can't do much more, unfortunately – we both have car payments and are paying off credit cards).
• Current loan is 30yr, FHA, 4.125%, total closing costs are ~$12,900. Monthly payment is showing ~$1,655, including fees, taxes, HOA, etc. This loan does have/include PMI.
• DCCU's "first-time-home-buyer" (the option they push/recommend) is 30yr, conventional, 5% rate (APR 5.068%), total closing costs are ~$13,440. Monthly payment is showing $1,700. This loan does NOT have/include PMI.
  Other DCCU options have either higher closing costs than this one, higher monthly payment, or generally both. With our other payments we already handle, I don't think doing a 20/15/10-year option is in the cards.

I was a little surprised, but on the face of it (to me) it sounds like what we have is better than whatever the CU is offering – theirs has higher rate/APR, higher monthly cost, higher closing costs... the only benefit is no PMI, which I'm not sure how that washes out with the rest of it. They did mention that the higher interest is deductible in taxes, which PMI wouldn't be and that it is supposed to help offset – but I don't know how much impact that has, given that this is our first home and I don't know how that works yet. (Also, is that something that would require itemizing to be able to take advantage of? I assume yes).

I don't know what details might need to be given, but I can provide more if needed. Anyone have any thoughts?