Is "cash out" refi worth it, if removing MIP at slightly higher APR?

[ice8zak]

Hello Everyone,

I have not posted here in a while, and wanted to see if you can provide some input.

 

Currently.

3.75% for an FHA 30 fixed with $290 a/month MIP

remaining balance about $285k

House worth about $350K

 

Refinance estimations

4.125% APR on a conventional, NO MIP

Refi Loan either for the balance, or with a $15k cashout

 

 

will this be worth it?

I have not applied yet, but my goal is to remove my MIP, and save those $290 a month on my monthly payment.

and wondering is also getting the cashout is a good option..

 

please advise,

thanks..

 

[Lummy]

When did you get the FHA mortgage? In other words, will the MIP eventually drop off or are you stuck with it for the life of your loan?

 

Just looking at the numbers, you don't have 20% equity if the house appraises at $350k. You'll likely still have to pay PMI if you go conventional

Edited July 30, 2014 by Lummy

[Stevelgar]

You don't mention your FICO but if you were offered 4.125% I assume your scores are decent.

I would do the rate & term refi without the cash with the Loan to value being between 80-85% the PMI would be really cheap & fall off soon or you can do single premium PMI and pay a lump sum 1 time included iin closing cost & be done with the PMI all together.

Then I would do a HELOC afterwards which are very low cost & cheap currently.

The $290 for PMI is a waste & if you can rid yourself of it it the sooner the better.

[DallasLoanGuy]

When did you get the FHA mortgage? In other words, will the MIP eventually drop off or are you stuck with it for the life of your loan? good question!!!

 

Just looking at the numbers, you don't have 20% equity if the house appraises at $350k. You'll likely still have to pay PMI if you go conventional but it will be cheap

[Lummy]

 

 

 

Just looking at the numbers, you don't have 20% equity if the house appraises at $350k. You'll likely still have to pay PMI if you go conventional but it will be cheap

 

That is true about PMI. I refinanced to conventional a year after purchasing. The appraisal came in higher giving my 19.5% equity and PMI is only $103. The earliest it will fall off for me is at the 2year mark unless I want to pay for another appraisal and hope .

[ice8zak]

Thank you very much for all the replys, after I posted I realized, I might not really need the cash out but do really wanna focus in getting rid of the PMI.

 

*additional data*

my FICO is 819 (thanks to crediboards)

got my FHA 2 to 2 and half years ago,... I believe it was prior to that "life time PMI"

 

@ Stevelegar:

I dont understand this... "I would do the rate & term refi" found the term, in investopedia.

or this "you can do single premium PMI and pay a lump sum 1 time included iin closing cost"

 

Thanks

everyone...

Edited August 1, 2014 by ice8zak