Should I try to refi my FHA loan?

[Anonymous]

We were thrilled to purchase our first home in September with a FHA 30 year fixed loan at 6%. That rate was pretty good at the time when the interest rates were higher. We are concerned about two things...

If the interest rates continue to fall, say around 5% should we refi? If so what costs are involved and will we need to go through the whole underwriting process again?

Second issue is with our current loan we pay the property tax and PMI each month which is about $300. We would much rather pay the property tax once or twice a year.

Any insight would be great!

[Anonymous]

6% is NOT high....5% and 4percenters are amazingly rare and....anyone who gets those rates should dance in the rain...because that is too amazing on a 30 yr fixed!

Refinancing means coming up with closing costs all over again, apraisal etc..... There is also a possibility that with only 3% down (assuming FHA min. down) the house won't appraise for what you owe.

The only way to avoid escrow is with 20% down (without being too costly for it to be worth it).....

This early in the game refinancing isn't going to be worth the cost to you.

Don't doubt yourself you did very, very good!

Message Edited by 1111mel on 12-19-2008 11:32 PM

[DallasLoanGuy]

fha requires escrows regardles of ltv

[Anonymous]

You've also got the streamline refi option with FHA.  Might help with some of the closing costs.  No appraisal required unless you need the house to be worth more to cover costs.  FHA has touched 5% in the past week but it seems to be a little higher than the conventional rates right now.  I'm going through the FHA process now and hopefully will be closing at 5.5% Monday.

[Anonymous]

Thanks for the feedback! We will stay with the current situation and be thankful we have our first home!