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Should I streamline my FHA, go to a 15 year conventional, refi at a 30, or just increase principal payments

I bought my townhouse in June 2009 (looks like I missed a sweet program by 1 month) on 30 year FHA at 5.5APR. I have 336k left on the loan with zillow value at 383k. I plan to sell in 3-5 years. I've been paying an extra 150 a month for 2 years in principle reduction. Should I streamline my FHA, go to a 15 year conventional, refi at a 30, or just increase principle payments?Thanks in advanced! by charle_536_673 from Springfield, Virginia. Jul 9th 2012 Reply


Ken Burrows (mortgagesforamerica)
#20 ranked lender in Nevada - 572 contributions

An FHA Streamline would be your best option.

Jul 9th 2012
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,000 contributions

Under the current FHA guidelines, if you want to go to 15 years, you will have to income qualify for your new loan if you don't save 5% of your monthly payment or more. This will be real close because 15 year mortgages have reduced mortgage insurance premiums. It's very possible that with a much lower rate, you paying $150 extra, and reduced mortgage insurance, you payment might just be the same your paying now.. And when you go 15 years, nearly 75% of your principal interest payment goes to principal, so you would gain equity much quicker.. so it's definitely worth refinancing even if you only plan to be there for just another 3 to 5 years.. The best advice I can give you is to 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 9th 2012
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Bert Carpenter (BertCarpenter)
#39 ranked lender in Arizona - 1,815 contributions

YYou are asking the right questions. Your biggest problem is that if you just missed the FHA cut-off like you indicated, then an FHA streamline now could actually be worse than continuing to do what you are doing now. My advice is to work with a local Mortgage Banker/Broker who can show you in easy terms the pros and cons of all of the options you have. Then you can make an intelligent decision based on the facts for your particular situation. Forget the big banks or big national mortgage factories. Unlike a bank employee, who is most likely just an order taker, a Mortgage Broker/Banker is Trained, Tested and Licensed in all aspects of Mortgage Origination and can properly guide you. Make sure you check out your selected Mortgage Originator at the National Mortgage Licensing System at www.NMLSConsumerAccess.org ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com 888-889-9950

Jul 10th 2012
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Peter Botros (PeterBotros)
#72 ranked lender in New York - 895 contributions

Contact your local lender and have them prepare the different scenarios for you. I would also consider an ARM if you are looking to sell in 3-5 years. You can get a very low adjustable rate. Weigh the pros and cons of each option. Good luck!

Jul 9th 2012
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Robert Le (robert_le)
#591 ranked lender in California - 36 contributions

i will do an arm 5-7 years. Most people said they will move in 5 years and it send up 7 years. You payment will be lower and you can always pay more in the principle.

Jul 9th 2012
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#28 ranked lender in New York - 2,236 contributions

Sounds like the FHA streamline is the best way to go.

Jul 9th 2012
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,553 contributions

Because you plan on moving, whatever loan you choose, it should be a no cost option. This will give you a lower rate without adding to principle.

Jul 10th 2012
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Phil Goldberg (PhilGoldberg)
#26 ranked lender in Virginia - 3 contributions

An ARM is an excellent idea. An FHA streamline will cost too much. Since your property is in Virginia, a no cost refinance with an ARM will not be done without incuring costs beyond what the lender can pay.A better choice would be a fifteen year conventional loan could make sense. You could do a no cost refinance where the lender pays your closing costs, the trade off being a slightly higher interest rate. There would be mortgage insurance but due to the rapid paydown of the fifteen year loan. It would be eliminated quickly. I would be happy to prepare some paperwork for your review. I work for Prospect Mortgage LLC here in northern Virginia. My offce is in Woodbridge and I live in Springfield.Feel free to call me at 703-912-9122 or email me at philgoldberg1@gmail.com.Thanks,Phil GoldbergLoan Officer with 15 years Prospect Mortgage LLChome office 703-912-9122philgoldberg1@gamil.com

Jul 10th 2012
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#134 ranked lender in Florida - 644 contributions

Go conventional 15 yr fixed and hope you get the zillow value if not PMI will be much cheaper than FHA MI factors..

Jul 10th 2012
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Mark Simon (mark.simon)
#9 ranked lender in Delaware - 83 contributions

Give me a call for a final quote over the phone and plan today. As one of the other comments said with your plan to sell you want either have no costs or a rate that will have enough change to overcome any closing costs. Mark 800-485-1387 Extension 107

Jul 10th 2012
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