Should we refi?

[cdtotten]

I am curious what those knowledgable of FHA refis think. We purchased our home in June of 2010. We paid $237,500 for the home, the house appraised for $240,000, and the loan we took out was for $233,300 @ 4.75% fixed for 30 years. At the time, it sounded like an amazing rate, but obviously things have gotten even better. We currently owe $228,982 on the house. Our overall financial position hasn't changed, other than income increasing by about 5%, my wifes FICO scores are around 760, mine are around 730-740.

Current payment is $1,625.71

  P&I - 1,216.47

  MIP - 104.31

  Taxes & ins - 304.93

We plan on living in this home for a minimum of another 8-10 years. What kind of rate would we be able to get right now on a refi, and do you all think it would be worth doing? What kind of closing costs should we expect? Is it easy to refi an FHA into another FHA? I understand that the FHA streamlined refi process could be used here?

[cdtotten]

Bump!

[Homebuyer24]

I don't think I have any answers for you but am considering also whether it is the right time to refi.  I didn't think we would refinance a little over a year after purchasing but the rates are low enough--the thought of getting 3.99 or lower seems too good not to consider it.  Because you did FHA that gives you leeway to refi via streamline.  Our loan was considered conventional even though it was a first and second.  I am hoping not to pay PMI with the refi and am wondering about the costs as well.  I am hoping to pay no more than $2500 for a refi but don't know what they normally cost.  I asked a family member who had refied but they had put the cost into the new loan so didn't have a number for me. 

[cdtotten]

Just in case anyone was interested, spoke with my mortgage broker to get some info...

Do to the recent change in FHA MIP premiums, refi'ing would actually increase our mortgage payment until MIP drops off. When we first bought our house, MIP was 1.75% upfront ,and .55%/month.... now it is 1% upfront, and 1.15%/month. Her FHA rate was 4%, but factoring in the increased MIP, our payment would increase by $20.

In the long run, it is still a good option, because after MIP drops then our payment will be much lower, and we also will get a credit for the upfront MIP paid at closing, but still kinda stinks.

[mauve]

What if your house appraisal were up?  I'm considering a refi on my FHA 203k loan (once the last little 203k bits are done, that is).  I'm suffering under the PMI for a million years because I have to get to 78% balance on the purchase price - so I have to pay off all of the renovation stuff, then pay down from my PURCHASE price. 

PMI is part of the reason I'm considering a refi - my appraisal came in low and I'm wondering if, since it would probably appraise for a lot more now (based on recent local sales), that would allow me to refi and not have to worry about PMI. 

[cdtotten]

In an FHA streamline refinance, they do not perform a new appraisal if no cash is taken out. If you feel that your property value is up, you could always get a new appraisal and refi conventional? Good luck.