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FHA Refinancing

Purchased a home in Dec 2010 with a FHA mortgage at a rate of 4.25%. Would it be possible and beneficial to refinance right now? Is there any way to estimate the costs involved and savings? Also, is there a way to get rid of the mortgage insurance premium? by raven3_468_998 from Lower Merion Township, Pennsylvania. Jul 5th 2012 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,486 contributions

Rates are better now, but the monthly mortgage insurance is higher, and FHA has a clearly defined "Net Tangible Benefit" rule that must be met in order for them to approve your loan. What this means is that you must save 5% of your monthly mortgage payment. So if the rate is .75% lower than your paying now, but the higher MI payment eats up .5% of that, then you won't meet the NTB guideline. Because you didn't provide enough information, it's hard to say exactly in your scenario.. so stop guessing and contact a LOCAL mortgage broker, not the local "Big" bank, and certainly not one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Jul 5th 2012
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Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

There is too much involved with analyzing your situation that the info you provided does not cover. The advice that I always give is to contact a local lender, not a BIG BANK or a broker. Have them do all the numbers for you, and then you can decide whether there is a benefit to you or not. If you would like for me to analyze your situation, give me a call at 908-933-0253 ask for Peter or email me at pbotros@omegaloans.net

Jul 5th 2012
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Linda Wintersteen (Linda123)
#63 ranked lender in Arizona - 1,256 contributions

THE ONLY way to get rid of the mortgage insurance is 1. pay down to the 80% value of your loan balance, or get a appraisal that shows your value is higher than the 80% if you want , send me your address to my email at yourloanpartnerforlife@live.com and I will send you back a property analysis linda

Jul 5th 2012
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Joseph Jesuele (info_555_585)
#56 ranked lender in Pennsylvania - 5 contributions

Yes, an FHA streamline will get your rate in the mid 3s and would not cost you anything.

Jul 5th 2012
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Patrick Cashman MNLS# 215938 (pcashman)
#26 ranked lender in Pennsylvania - 18 contributions

Yes to all your questions. The key is upfront MIP and monthly MI have increased since you financed thus potentially off setting the savings accomplished by lower your rate. Eliminating MI can currently only be accomplished by refinancing into a conventional mortgage at this point and if your new loan is < or =80%. The current value of your home otherwise you would have to pay down principle or get a second mortgage to make up the difference.If you had financed before May 31st 2009 there is a significant reduction in both the Monthly and upfront MIP on an FHA streamline refinance and it would be worth considering taking advantage of today's rates. There is a possibility that the inducement to refinance will continue to roll forward to include all FHA loans once they have hit the three year mark and once the previous upfront MIP is past the refund date (but this is not certain and only speculation). Refinancing into another FHA loan has both pros and cons. One the loan is assumable which could be the deciding selling point in a higher rate market but the minimum time period you would be required to have MI would be reset to 5 years regardless of your LTV. As with all loans they are very individual to the situation at hand, needs and capabilities of the borrower and the property itself. I suggest speaking directly with a couple of loan officers to find out the specific options (including costs) and determine what would benefit you the most and meet your needs in your goal of home financing. Best of luck and I can always be reached at my desk for any further questions.

Jul 5th 2012
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#1 ranked lender in Florida - 730 contributions

off the cusp its looks like almost a wash

Jul 5th 2012
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Matthew Wells (mwells1188)
#55 ranked lender in Maryland - 17 contributions

The only way for this to make sense for you would be if your home value has increased in the last few years and you could refinance into a conventional mortgage at an 80% LTV. Rates right now are at an all time low but with any FHA loan you are going to be required to have Mortgage Insurance for 5 years and a 78% LTV. You have a couple of things working in your favor;1. Property values have been increasing2. You bought after the market crashed3. Your area was not hit as hard as some other areas in the countryI would be more than willing to explore some options with you and stear you in the right direction, as far as closing costs go if the deal makes sense for you I would be more than willing to chop them down to a minimum, my company does lend our own money so we do have some leeway there. Feel free to contact me at 443-471-4339 or mwells@equitymortgagelending.com.

Jul 6th 2012
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