Real Estate and Home Mortgages - should i refi
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necjeb
11-01-07, 10:07 AM
i have a fha 30yr fixed @ 5.75 % and pay PMI. loan bal is 102,000. i also have a 60,000 home equity loan rate is prime +0. House appraised valve now is 293,000. Would now be a good time to refi? thanks for any help
slumlordfrank
11-01-07, 04:11 PM
OK, I've not kept up with all the things that go on with FHA loans now, but I think you have MIP (similar to PMI, but for FHA loans) instead. Are you sure that you didn't pay a premium for it up front? If so you won't reduce your payment on that part of the loan.
If that is the case I'd think you'd be better off just getting rid of the HELOC by paying it off quicker while rates are low.
Can you get as good, or better rate than the 5.75 on a conventional/conforming loan? How long will you stay in the house (likely to stay)? What are the costs of acquiring the new loan?
Take all of your costs, getting the new loan.
Figure all of your savings-lower payment on the second.
Calculate how long it'll take you to recoup your costs, and if you're planning on staying in this house that long.
WARNING: The above does not apply if your are, or are planning on using your house as a "bank". That is using up your equity to fund your lifestyle. If the HELOC was a one of a kind because you did a major improvement, or paid a year's tuition at an Ivy League school, then it's OK. If you're "spending" your house you need to look deep within yourself.
frank
If that is the case I'd think you'd be better off just getting rid of the HELOC by paying it off quicker while rates are low.
Can you get as good, or better rate than the 5.75 on a conventional/conforming loan? How long will you stay in the house (likely to stay)? What are the costs of acquiring the new loan?
Take all of your costs, getting the new loan.
Figure all of your savings-lower payment on the second.
Calculate how long it'll take you to recoup your costs, and if you're planning on staying in this house that long.
WARNING: The above does not apply if your are, or are planning on using your house as a "bank". That is using up your equity to fund your lifestyle. If the HELOC was a one of a kind because you did a major improvement, or paid a year's tuition at an Ivy League school, then it's OK. If you're "spending" your house you need to look deep within yourself.
frank
Family Guy
11-02-07, 11:04 AM
What Frank said: figure costs and time to recoup them in savings. DO NOT refi on 30 years again or it'll probably be 10 years before you break even.
Short answer: no, no benefit to refinancing. With an FHA loan you pay a 1.5% up front MIP and have a nice rate of .5% for your monthly premium, based on loan amount. That's lower than a conventional loan, unless you put down over 15%. On top of that, if you refi paying no points/origination (the only way to go in most cases) the increase in your rate will probably cost you more than you pay in your monthly MI right now. You do not get a refund of the unused portion of your 1.5% these days unless you refi onto another FHA loan. Just not worth it.
No, stick with what you have. ;)
Short answer: no, no benefit to refinancing. With an FHA loan you pay a 1.5% up front MIP and have a nice rate of .5% for your monthly premium, based on loan amount. That's lower than a conventional loan, unless you put down over 15%. On top of that, if you refi paying no points/origination (the only way to go in most cases) the increase in your rate will probably cost you more than you pay in your monthly MI right now. You do not get a refund of the unused portion of your 1.5% these days unless you refi onto another FHA loan. Just not worth it.
No, stick with what you have. ;)