Refinance Options? Currently at 5.25% - High D/I

[beegeez]

Last April I bought a house (in my name only) with a 203K FHA loan at 5.25%.  The bank is now increasing my payment from $1800 to over $2K/month for escrow shortages, escrow reserve, and a slight increase in my homeowners insurance. 

Unfortunately because of some student loan payments that have recently kicked in ($450/mnth) my debt to income is well above 55%.  I also have about $150/month in CC bills which is helping.

Is there anyway I can take advantage of today's low rates?  With my wife's income, we can easily handle the payments, but due to her poor credit and a bankruptcy on her file, we cannot use her income.

Any help is appreciated.

[cdtotten]

Yes, you could do a FHA streamline refi that wouldn't require any verification of credit/new appraisal or anything. The only requirements are a lower payment amount as a result of the refi and no cash out. Just do a google search for FHA streamline refi and you will find tons of details.

[Anonymous]

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[beegeez]

This is what the lender I have been working with is telling me:

"Most investors have their own overlay guidelines on top of FHA’s guidelines (they all want credit scores pulled, but most want debt/income qualifying as well).  With that said, there maybe some investors that don't require this, but then the lender credit isn’t quite as good.  The 3.75% rate can cover the up-front MI, as well as about $2300 of the $5400 in closing costs.  So you would have to come to the table with the difference of $3,100 (you can’t build in closing costs with the FHA streamline refinance)."

Does that sound right?  I can't afford $3,100 not to mention the dramatic increase in mortgage insurance I'd have to pay (It's $100/month...they're telling me it'd be closer to $250/month after I refinance).