Can we get out of our FHA? Should we?

[Anonymous]

Notes:

Purchased home in 2011 in Cali (bottom of the crash) for 125k at 4.25

Incurred a lot of CC debt in the first year or two buying furniture, fixing up the house, etc

Took out second mortgage in Oct 2013 for 22k to pay off high interest CC debt

1st mortgage pmt: 940/mo w/ taxes and insurance including 120 PMI

2nd mortgage pmt: 159/mo for 20

House is estimated right around 200k right now (being conservative, smaller houses in our neighborhood have sold for 230-240 recently)

1st mortgage balance 115k

2nd mortgage balance 20k

I am wanting to roll our two mortgages and POSSIBLY one of our cars (7k or 13k) into one payment.  Is this possible given that we have already gotten two mortgages in the past almost 3 years?  We want to use the equity to borrow against the home and get out of the FHA to drop the PMI.  The amount of PMI almost covers our 2nd mortgage.  Should we wait it out until it's been longer since we got our second?  MIL (who is a broker) has said we shouldn't budge because our rate but aren't they still pretty low?

We have 85k combined income.  

[ezdriver]

The answer depends on whether or not you can qualify for a refi at the 80% LTV or less. Only way to find out is to ask a mortgage originator to review your situation. All we can do here is guess.

Take your total monthly housing payment plus all of your debt service payments. Divide that number into your gross monthly income. The result should be as close to 40% as possible and that is yoru DTI [debt to income ratio]. What is your credit score? Should be 680 or better on a lender-pulled credit report. Hopefully no baddies on your credit report. Finally, you must have at least 20% of equity, or enough cash to bring it to that level, in order to avoid PMI.

[Anonymous]

Thank you for your reply!

DTI is less than 30%.  Mortgage is in husbands name only and his score is 691.  He does have a medical collection for our daughter that was actrually paid yesterday and will be removed before we try to refi.  He has a LOT of inquiries though.  A lot.  0 late payments, ~15-20% credit utilization.  I think credit/income wise, the numbers do add up.  I guess I'm just wondering if it's a wise thing to do.

[TimeToRecover]

I do have one question.  I understand wanting to combine mortgage loans but why would you want to include the car loans.  Untless the car loan interest rate is much higher then the mortgage rate I would think you would be paying more money.  

[Anonymous]

They are both 7%.

[BrianB_The_Loan_Professor]

If the home appraises for 200 you can borrow up to 160k and avoid PMI

Your rate will depend on your scores -itwill be considered a cash out but thats not unusual

You just need to get with someone that can run your numbers and see if the automated underwriting wil approve you.

Where are you in CA - not too many places left where homes are 200k - they have started the climb back up around here

Brian