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Hey guys,
Wanted your opinions on doing an FHA Streamline refinance.
I'm eligible to do this through my current lender.
I've never been late on the mortgage. My current scores are high enough to qualify, they need a 620 and I've got well above that.
Here is the deal, I can't roll closing costs into the new mortgage, so these are out of pocket expenses amounting to about 4k
I've got 4.3k sitting in an underperforming Roth IRA. I've been informed that I can withdraw these funds at any time, and would probably have to pay a 10% penalty
I've got the following credit card obligations:
4k/4.2k Discover Card... 0% for 12 months will pay this off in August
4k/22k on NFCU 11% will pay this off next month
900/5k on Amazon Visa. will pay this off next month
Amex it varies on how much I spent in the month
The question is, I was planning on doing this refi in Sept... "points to siggy"
Should I wait until September? Should I do it now and get it over with?
I know I should be patient.. I've been waiting since april for the new streamline rules to go into effect.
@webhopper wrote:Hey guys,
Wanted your opinions on doing an FHA Streamline refinance.
I'm eligible to do this through my current lender.
I've never been late on the mortgage. My current scores are high enough to qualify, they need a 620 and I've got well above that.
Here is the deal, I can't roll closing costs into the new mortgage, so these are out of pocket expenses amounting to about 4k
I've got 4.3k sitting in an underperforming Roth IRA. I've been informed that I can withdraw these funds at any time, and would probably have to pay a 10% penalty
I've got the following credit card obligations:
4k/4.2k Discover Card... 0% for 12 months will pay this off in August
4k/22k on NFCU 11% will pay this off next month
900/5k on Amazon Visa. will pay this off next month
Amex it varies on how much I spent in the month
The question is, I was planning on doing this refi in Sept... "points to siggy"
Should I wait until September? Should I do it now and get it over with?
I know I should be patient.. I've been waiting since april for the new streamline rules to go into effect.
I have just started the streamline refinance process with my current lender. We are getting 1.5 points towards closing...at 3.875% rate. Because of the new rules that went into affect with upfront MI and the reduced MI monthly rate, the 1.5% will reduce my closing costs from $2.4K to ~$600...and my mortage will reduce by $175/month. I expect to recoup my closing costs in approx 3 months.
I would recommend you talk to the LO and discuss which interest rates will give you the most points and still give you a nice reduction in monthly mortgage payment. If you take $$$ from your IRA, i'm sure you will have to pay income taxes on top of the 10% penalty. I recommend that you add this cost to the amount you will have to bring to the closing table, divide the total cost by the amount your mortgage will reduce...this will give you the number of months it will take for you to recoup the upfront costs. Then you can make a determination of whether refinancing makes good financial sense for you right now. My personal rule of thumb is if it takes me longer than 12 months to recoup my closing costs, then it's not worth it to me.
As long as your DTI is below the maximum required by your lender, I would not worry about the amount of cc debt that's currently showing up on your report. Your lender should be able to play around with interest rates to see what is best for your situation.
Before the new rules went into effect on 6/11, it would not have benefited for me to do the streamline refi (because of the upfrom MI and high MI monthly rate), now it is very beneficial to me.
FYI....my mid score is 675.