Refinance My FHA Loan Now!
If you have an FHA loan and want to drop your monthly PMI now, rather than later
you have come to the right place.
If you feel you are at 80% Loan to Value , You are Ready!
Florida Mortgage Banker
Why not use a conventional loan and refinance your FHA loan now and get rid of the PMI now. Especially on larger loans the monthly mortgage insurance can amount to as much as $200 to $300 a month. That is motivation enough to do a Fannie Mae Refinance today.
In many cases, I can also pay some of your closing costs which makes this option even smarter.
The Federal Housing Authority (FHA) is alive and well partly because they get to collect large amounts of PMI or "private mortgage insurance" on each and every loan.
They get a lump some that is financed and added on top of your base loan amount and then just for fun they continue to collect monthly fees that are just a complete throw away for you. For many years they made us wait until the five year mark before we could drop the monthly PMI. You could pay for an appraisal and send it in and see what they say. Newer FHA loans, as of 06-03-2013, have PMI attached for the life of the loan, not just 5 years.
Real Estate prices in Florida have been appreciating nicely so some of you may be pleasantly surprised that you are already at 80% LTV. (Loan to Value)
We can’t really blame FHA because they do offer amazing 96.5% financing at unbelievable interest rates. FHA offers the ultimate opportunity for first time home buyers but at the pace of appreciation in Florida, many home owners are getting into a new loan at the three year mark because their home has appreciated 16.5% or better in that time. Call me or email me and we can do the math for you.
Here is a chart that reflects how they have adjusted their fees over the years.
As of 006/03/2013 the monthly PMI is attached to the loan for the Life of the loan.
All the more reason to keep an eye on your homes value and refinance into a conventional loan when you get to the cut off, 80% loan to value which a conventional loan allows.
If I can pay some of you’re closing costs on a larger loan, that is even more motivation for you to look at what you have and see what you can get. Remember when pricing your loan there are always three scenarios.
1.) I can get you a rate where you pay a discount to buy your rate down.
2.) I can give you the par rate or the no points rate.
3.) Or I can give you a higher rate and pay closing costs for you.
We will review all of these options when it comes time to price your loan.
Older versions of FHA have a 5 year time frame that you have to wait before you can drop your PMI. Many of my customers who purchased around the end of 2011 or beginning of 2012 are weighing doing this now or waiting for that magic day when you get to 78% loan to value. If you do the math, it makes sense to refinance now. Please see the example I prepared below.
If your homes value has truly appreciated above market trends you may be in a situation where you can do a 80% loan and take some cash out as well. If you did really well on your initial purchase, this may be possible.