Profile picture for KellyBurns2005

FHA Streamline or Conventional Refi?

Need some advice re: which is the better way to go?

Bought our house in April 2009 for 370k using FHA 30 Yr Loan so we could put the min amt of cash down (3%) and mtg rate was and is 5.00%.  The PMI was/is $154/mo. 

Its 3 yrs later now and we've been paying right along (not in default).  Current bal is 344k.  I'm eligible for the FHA Streamline Refinance which would drop my mtg rate from 5% to 3.7% (or whatever the FHA rate is today).  But what happens to all the PMI I have paid the past 3 years?  Also, we've invested a good chunk into the house (huge new garage, new hdwd flrs, landscaping, etc).  Zillow estimate is pretty consistently at 500k for past couple years, whereas my mortgage balance is like I said 344k.  Why am I still paying a monthly PMI????  Seems kinda ridiculous right?  My credits core is around 850 so its not like I'm a risky investment.

Is FHA refi or Conv Refi better given this scenario? Thanks for any info.

  • July 25 2012 - Chicago
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Answers (6)

Once you don't need the benefit of a small down payment you no longer should consider FHA as an option. Now that it appears you have sufficient clearance to refinance with an 80% LTV or lower you should go conventional. Any previous PMI paid is gone. It's like making an insurance payment. They don't refund you :-)

Click on my profile and view my preferred lenders Adam Soroka from Long Grove Mortgage and Dominic Condotti with Chase Home Loans. They will be of great assistance to you.

Lastly, with money being so cheap I would recommend you do a 30-year fixed product. This will give you great flexibility and potential leverage moving forward. Good luck!
  • July 26 2012
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The reason to use a conforming loan is your loan to value, if it appraises for $500k then you have a 69% LTV. If you did a 30 Yr FHA loan you would pay MI for at least 5 years, maybe longer. The upfront MI you paid along with the monthly MI is gone. You should act so you can lower you rate or term or both, and stop paying the monthly MI. 
  • July 25 2012
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Profile picture for KellyBurns2005
Thanks but why conventional refi? 

Also how do I get back my 3 years of PMI already sunk into my existing FFHA loan?

Thanks.
  • July 25 2012
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Profile picture for KellyBurns2005
Why conventional refi?  Better rates than FHA can offer?

Also, what about the PMI I've paid for 3 yrs on my existing FHA loan? Can I get this back if I go streamlined fha refi??
  • July 25 2012
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Profile picture for Matt Laricy
I would go conventional. But speak with a well qualified lender. Speak with a few of them. There are some very good ones on here. They can tell you what they can do to make the situation best for you.
  • July 25 2012
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Conventional refi if you qualify.......
  • July 25 2012
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