Need mortgage broker input

[nbean]

My husband and I are currently in a loan that I know is not optimal. We've got a couple issues I'd like to solve (or at least one) but not sure if we have options or if there is a product out there that can help us. 

The situation:

• Our current home was bought 5 years ago for $495,000 with an 3.5% down FHA loan at 5% interest.
• We currently owe about $445K on the balance and our payment with insurance,PMI and taxes = $3,595 (PMI about $332/mnth)
• The current house value is easily $590K (probably closer to $610K)
• We have about $80K credit card in debt 
• We have $330K annual W2 income
• My credit scores are the lowest - median Mortgage score of 662 

What I'd like to know:

1. Can we refi out of the PMI - if so, what does the house need to appraise at and is my credit enough for a conventional loan?
2. Should I just streamline the FHA?
3. Can I cashout refi and apply the cash to the higher rated credit debt?

What would you guys do? Or should I just keep chugging away and do nothing?

[ezdriver]

Refi rates are generally higher than purchase rates. All FHA mortgage have PMI. Conventional requires a much higher middle score. While PMI can be avoided with less than 80% LTV, the rate will be higher. Seems streamling the FHAand saving some money is the way to go. That's my 2cents and what I did earlier this year.

[StartingOver10]

Not so sure I would streamline as your loan was originated 5 years ago before FHA mortgage insurance became permanent for the life of the loan in 2013 

Find out what you need to do to drop your MIP (PMI for conventional/MIP for FHA).  You need to speak to your current loan servicer to see what they need to drop the MIP on your current loan. That will help a little.

EZ is right about needing a higher score so you can get a better rate if you refi conventional. Your home would have to appraise for a minimum of $557k to refi conventional without PMI. That doesn't include finacing in any closing costs 

If you decide you want to take some cash out to pay off credit card debt, then consider a HELOC behind a conventional loan.  That way you won't have mortgage insurance but the HELOC or even the second mortgage (if you don't qualify for a HELOC) can be used to pay off higher interest cc debt.

With $330k income per year you should be able to pay off the debt enough to raise your scores into the 700s with a little bit of credit card debt management. Visit the rebuilding forum for some ideas on the best way to pay down your current cc's and bring up your score.  

[Anonymous]

You definitely have options, but if you have 20% equity you should definitely refi into a conventional loan. How easily can you get your score up? If not easily/quickly and your other half's score is much higher, will they qualify on their own? And then maybe you can be added to title. Just a thought.