Long story short, my Fiance and I closed on our first home 2 months ago. We ended up with an FHA loan because we couldn't go conventional at the time due to the Fiance's bankruptcy almost 4 years ago.
We'd like to get out from under the PMI as that alone is ~$400 and wouldn't come off for 9 years according to our loan docs. That turns out to be almost 40k which would be better served going towards principal in our opinion.
What with rates being even lower than our 3.75% and housing prices on the rise in our county, we think it might be worth trying to refinance in the near term instead of waiting a bit. Is it too soon tho? Would the bank servicing our loan cause problems? Other things I should have to worry about? Would the home value go off the sale price or would a new appraisal be necessary?
Silly question about refinancing
Started by
Lummy
, Jul 11 2012 07:22 PM
2 replies to this topic
#1
Posted 11 July 2012 - 07:22 PM
#2
Brian B The Loan Professor
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Posted 17 July 2012 - 12:44 PM
Long story short, my Fiance and I closed on our first home 2 months ago. We ended up with an FHA loan because we couldn't go conventional at the time due to the Fiance's bankruptcy almost 4 years ago.
We'd like to get out from under the PMI as that alone is ~$400 and wouldn't come off for 9 years according to our loan docs. That turns out to be almost 40k which would be better served going towards principal in our opinion.
What with rates being even lower than our 3.75% and housing prices on the rise in our county, we think it might be worth trying to refinance in the near term instead of waiting a bit. Is it too soon tho? Would the bank servicing our loan cause problems? Other things I should have to worry about? Would the home value go off the sale price or would a new appraisal be necessary?
You would be fine now but what has changed that would make you eligible for a product that would get rid of PMI?
A lot of folks would like to get out from the PMI but in most cases the credit or lack of funds for a down payment force them into it - if you do a refi they will require an appraisal but will go off of the sales price - they need to make sure it hasnt gone down in value - if you have scores high enough you could go conventional and do a one time PMI upfont and not have monthly - the program requires 5% equity and the charge for the upfront is between 2% and 2.5% of the loan amount - you cant add in closing costs so those would have to be paid for out of pocket as well.
B
#3
Brian B The Loan Professor
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Posted 17 July 2012 - 12:45 PM
the BK will still be an issue as well
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