with a balance of 428K. It is single family property located in VA 22066. My loan is a 30 yr fixed FHA loan at 5.25% interest. I am looking to continue under the FHA streamline programs to lower my interest rate. My current FICO score is 785. I am currently paying $3250 (inclusive of P&I, escrows, home insurance, and the MIP). The quotes I have received are with FHA 4.25% with a monthly payment of $3060 again (inclusive of P&I, escrows, home insurance, and the MIP). With a difference of $190 in monthly payments and a closing cost of $6350. Even if I consider the escrow/MIP refunds (may be close to $3000), I am wondering if it is worth getting it refinanced. It will take about 16 months just to recoup the new closing costs.Also, isnt the appraisal waived in FHA streamlined refi if I pay the closing costs?
Bozeman,MT | Aug 2nd 2011
by maryma_168
Answer
by jmarr91
by jburke
Hi Maryma_168,Are you paying any points for the 4.25% rate? The other thing to consider here is the possibility that you'll skip a mortgage payment which effectively reduces your closing costs by $3,250.00 and even if you don't you'll still save $65,360 in interest over the life of the loan.Here is how I came up with that number.360 months minus the 16 months it will take you to recoup the closing costs = 344 months X $190 per month in savings = $65,360.00.http://www.fhamortgagesdoneright.com Aug 2nd 2011
by togabro...
Good Afternoon and Thank You for your question.There are several factors to consider when refinancing. Cost- Benefit- Goals of the loan etc. Depending on your lender, you can usually have the 1st couple of mortgage payments waived and that can weigh into your savings. Also- your up-front MIP and your monthly mortgage insurance premiums are typically 100% tax deductible so that money should be coming back to you. By my calculations it seems that an FHA streamline could be a good move for you. You may be eligible for an appraisal waiver- you would have to have your lender or whomever you chose to handle this transaction, submit your file and see. Best of luck to you and please do not hesitate to contact me if I can be of any further assistance. Aug 2nd 2011
by fstadler
YOu should be able to get the lender that you are working with to reduce your closing costs quite a bit. IF you can't lower your payments by 5% FHA won't approve the loan. IF you are doing an FHA streamline you don't need an appraisal at all. Loan will be based on your last FHA appraisal. Without an appraisal you will need to set up a new escrow account unless you are refinancing with the servicer who holds your mortgage presently they will transfer the escrow to the new loan. If you have to bring cash to close to set up the new escrow account please keep in mind that you will receive your escrow refund in about 30 days. Aug 2nd 2011 |
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