How soon is too soon to refi? How much will it cost, etc?

[mccallb]

Hey gang,

Thanks again for all the great advice over the years.  You guys have seen me go from the 500s with a single 1K credit one card and no idea what Im doing to a homeowner in the 700s with 30K available in revolving credit.

So I come again, seeking help. I bought my first home on December 5th last year.  I just barely missed my ability to get a standard loan, and ended up getting FHA, figuring I'd refi later.

So My biggest concern, of course, is wanting to ditch the PMI on the house.  The house is 286K and the payment is 1900 per month.  The PMI obviously accounts for a ton of that.  Now I've taken off a grand total of about 3000 this year, but the zillow value of the house has skyrocketed.  I was the first house in the subdivision, and now we're up to 10.  I have the biggest lot and the very best view with arguably the greatest use of size/upgrades. (I didn't go crazy, and my upgrades are actually valuable, hardwood floors, custom kitchen)

My question is, my Zillow Estimate is 336K. (it was like 350 for a few weeks, but there was a correction (which I'm glad about, since that seemed absurd) But has stayed steady at 336k.  My quesiton is this; I realize zillow estimates are notoriously flaky and not real valuable. 

I probably couldn't/wouldn't SELL this house for 336k, although, it might, since its the premiere lot, because there are like 80 other lots in the subdivision for sale.

If I wanted to refi, would that matter? What would a refi appraisal have to say about my property do you guys think?  If the appraisal is high enough, I can avoid PMI, right off the bat, right?

Is that possible in this case? And if so, how much would the refi cost me out of pocket?

Thanks again!!!

[StartingOver10]

I can't answer the question for cost of the refi, but since you closed in Dec 2014 your MIP (Mortgage Insurance Premium) rate is much higher than if you were to originate a new FHA loan today.  So even if you could not drop MI altogether, you should be able to reduce your monthy payment even if you refinanced with another FHA loan. 

Contact a lender and get quotes for a refinance both FHA and conventional so see if the numbers work for you. 

I would stay away from the big box banks (Chase, Wells Fargo, BOA). 

[mccallb]

Thanks for the info!

I use DCU. They have my cars and are wonderful.  How much would I drop the monthly on the house if the house doesn't appraise for significantly more than I bought it, would you guess?

[StartingOver10]

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@mccallb wrote:

Thanks for the info!

I use DCU. They have my cars and are wonderful.  How much would I drop the monthly on the house if the house doesn't appraise for significantly more than I bought it, would you guess?

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That is an excellent question for your loan officer at DCU.

IIRC the MIP rate is 85 basis points now and was 135 basis points in Dec 2014.  It varies by amount and term. Here is the ML from HUD.gov for the rates (see p2)

https://portal.hud.gov/hudportal/documents/huddoc?id=15-01ml.pdf

[mccallb]

Well sounds like it may be worth it no matter what.

Thanks!