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Refinance

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Peter1142
Established Contributor

Refinance

I am paying $240/month on FHA MI, 3.75% interest. I think my property values have increased to the point I have 20% equity. I have a 720+ middle score.

 

I don't have much cash for a refinance. What are some good options to get rid of that MI?

Message 1 of 6
5 REPLIES 5
StartingOver10
Moderator Emerita

Re: Refinance


@Peter1142 wrote:

I am paying $240/month on FHA MI, 3.75% interest. I think my property values have increased to the point I have 20% equity. I have a 720+ middle score.

 

I don't have much cash for a refinance. What are some good options to get rid of that MI?


Depending upon the appraised value for the refi, you probably could roll your closing costs right into the new mortgage. 

 

Contact your LO and have him compare a couple of options for you.  Even if you don't get quite 20% equity it is worth it to refi usually.  

Message 2 of 6
ShanetheMortgageMan
Super Contributor

Re: Refinance

For a refinance, FHA rates are currently lower than what you are at now, but you'd still be paying MI.

 

For conventional, rates are similar to what you have now, and if you have the 20% equity then you would ditch the $240/mo MI.  If you don't quite have 20% equity, then with conventional you could pay a very small amount of monthly PMI, pay a small amount of upfront PMI in order not to pay the monthly PMI, or you finance the mortgage amount in excess of 80% of your home's value on to a 2nd mortgage (doing a new 1st mortgage at 80%, remainder on a 2nd) - avoiding PMI completely.  When you do that 1st/2nd mortgage combo though, the interest rate on the new 1st mortgage suffers.

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Message 3 of 6
Peter1142
Established Contributor

Re: Refinance

I don't want to go back to my original LO, it is a big box bank and it was painful. I did email a mortgage banker, we'll see what he says.

 

I don't want another FHA loan, I can't imagine the slightly lower rates will make up for the MI. This $240/month is a huge waste of money. If I can be rid of it and get a conventional loan with prime rates good riddance.

Message 4 of 6
StartingOver10
Moderator Emerita

Re: Refinance


@Peter1142 wrote:

I don't want to go back to my original LO, it is a big box bank and it was painful. I did email a mortgage banker, we'll see what he says.

 

I don't want another FHA loan, I can't imagine the slightly lower rates will make up for the MI. This $240/month is a huge waste of money. If I can be rid of it and get a conventional loan with prime rates good riddance.


^^^Good call!  

 

Agree about the $240/month.  It is a huge waste of money. I hope you have a much better lender experience this time around,

Message 5 of 6
Peter1142
Established Contributor

Re: Refinance

I am not finding any options that do not have huge costs involved, sadly. I thought you could do a refinance for cheap, I guess not.

Message 6 of 6
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