I am 5 years into a 30 year FHA loan and considering refinancing to drop the PMI off the loan. What is estimated cost to refi to a 30 year conventional? Trying to decide if its worse to keep paying PMI or to go ahead and bite the bullet to refi knowing. My house will appraise for well over what I bought it for so no problems on that side. My rate is 3.875 currently so not sure I will get much lower than that.

I just refied a 30 year at 3.375 to a 15 at 2.625. The refi costs were between 1% and 2% of the loan value. This includes the appraisal but not a survey (I already had one of those from the original purchase). The bulk of the closing costs were rolled into the loan, so I only paid about $500 out of pocket (including the appraisal)

These threads give me "head hurt". I have no idea if the deal makes sense. Throw in " I just did this" and I do not know market price when "you did this".

Value and loan balance?

Do you escrow?

Do you want 30, 20 or 15?

What is your credit score if known?

Hope I can help.

SB

Sorry, for the head hurt.

House value $225k
Loan balance $153k
I do escrow
Want to stay in 30 year most likely.
Credit score is excellent.

Figure 4000 and a little more or less. Plus rebuilding escrow and that cost depends on annual taxes and insurance costs. Keep in mind that the old escrow account is refunded to you in 3 weeks or so. So you can finance the new escrow or bring funds to the table if you want to keep the loan balance where it is now.

quote:

---

Figure 4000 and a little more or less. Plus rebuilding escrow and that cost depends on annual taxes and insurance costs. Keep in mind that the old escrow account is refunded to you in 3 weeks or so. So you can finance the new escrow or bring funds to the table if you want to keep the loan balance where it is now.

---

Would it really be that much? I paid less than that to refi a $227k loan (which is now a $230k loan plus about $500 out of pocket). I do not escrow, so refunding that account didn't apply. My estimated closing costs were a lot higher, but that's ultimately what I paid.

So your costs were 3500? 230-227 = 3k. + 500.

I could get there it depends on your current rate and what makes sense for the reset rate

quote:

---

So your costs were 3500? 230-227 = 3k. + 500.

I could get there it depends on your current rate and what makes sense for the reset rate

---

A little less than that actually, because the balance I owed before the refi was over $227k (closer to $228, IIRC). All total, it was probably closer to $2500-$3000, including my out of pocket.

I always thought closing costs were tied to the amount of the loan (which I why I initially gave the percentage that I paid). But, I am by no means even close to being knowledgeable on how that works. I just look at the bottom-line cost to me.

Lots of ways to work the numbers. If you want specifics my contact info is in my profile.

I refi'd in April this year. 30 yr conventional and 30 yr secondary loan both rolled to a single 30 yr conventional at the same rate 3.625. (the secondary loan was much higher though, 6.5 I believe)

So I saved about $150 a month by getting rid of that secondary loan (it was a 80/10/10 to avoid pmi.

I paid like $500 all in. Appraisal was waived. Low $300k balance, high $400k home value. I opted to add our escrow balance to the new loan and pocket the refund from the original escrow account; we were strapped for cash and needed it. But I don't consider that a 'cost.'

I didn't realize in such a competitive market it would cost several thousand dollars to refi. I was only convinced to do it because of the very low cost and quick break even point, which was just a few months.

There is no exact situation. The rate/costs are NOT independent of each other. What I mean by that is that you can take the lowest rate on a given day and pay "full" cost (without any origination) OR take a slightly higher rate and pay less closing costs.

It is not a one size fit all situation. If you are pretty sure you will not own the house for more then say 5 or 6 years the lowest rate might not be the best option as the slightly higher payment but lower closing costs makes the payback period of the costs zero or within a year. That way you have 5 or 6 years of a lower payment and the math works out the best.

If you are pretty sure you will own the home for a long time, the lower rate might make the most sense even if it takes, for example, 3 years to payback your costs with your monthly savings as you will have a long time to enjoy the lower monthly payment.

It often surprises people that the lowest rate available is not always the "best" scenario after doing the math. The rate/terms have to be looked at together as opposed to separate issues.

A note on appraisal waivers as it was mentioned above, assuming you are looking for a conventional loan which a loan under 417k that is not a FHA or VA is almost guaranteed to be, appraisal waivers are granted by automated underwriting systems that both Fannie Mae an Freddie Mac both use.

These waivers, called property inspection waivers (PIW) are based on your property and your credit file. In other words, to get one you likely have a pretty good amount of equity and likely have pretty good credit/debt to income/reserves. Again, these are determined by the automated system that all lenders, big and small, use. So, if you get a PIW with lender A you should get one with lender B as well.

Its a great money and time saving advantage but when in comes to conventional loans, it is not really up to the originating lender.

Jay, your "real-time" rates say they were last updated April 1, 2016... not exactly real-time! FYI.

Drew,


Yes, I know. Some how the software that feeds it to the different places it is supposed to go stopped working. Only so many hours in the day and my technical skills are not enough to snuff. I keep meaning to just pull it off my signature and with your reminder will do that today!

I assume the only way to avoid the appraisal is to be below the 80% threshold right?

I own ~15% of my house at the price I paid for it. Would like to refi to get out of the 80/10/10, but have hesitations about what an appraisal on a refi would return.

06 how long since you bought the home?

As for appraisal it's not scary. Call your buyers agent and ask them what they would list the house for. They should do that as a courtesy. You might like like what you hear. The appraiser is going to use the same comps.
Edit: wrong emoti thingy

Steve - Been in the house just over 2 years. I've talked to my realtor and he was the one who mentioned appraisers tend to be more conservative on refi loans.

06 I want to be diplomatic so I will say a realtor should provide value estimate and stop opining. They have nothing to do in a refi and you should rely on mortgage for appraisal.

Appraisers DO , if they are ethical, and vast majority are, will assign value based on comps not purchase vs. refi.

Edit to be clear.

Yes you did. Thank you. I will address your email in full tomorrow

You being half way around the world is a challenge.

Watching Jay and Steve compete for business is fun.. I only come to watch.

quote:

---

Jay, your "real-time" rates say they were last updated April 1, 2016... not exactly real-time! FYI.

---

I've been meaning to tell you that for a while now. We compete in the same space when it comes to Jumbo Business.

Mike don't forget jj. You will hurt his feelings