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Is a FHA Streamline Refi a realistic option

  We have a FHA loan originated in 6/2004.  Original loan amount was 187,000 at 6.375% for 30yr.  We currently owe 165,000 and have a HELOC with $10,000.  Current monthly payment on the primary including taxes and insurance is 1435.00.    The thought of refi after 8 years makes me ill.  I don't want to start over again at 30 years.  I keep getting these offers to do a FHA refi, but I don't want to pay a bunch of fees and have to come to the table with a lot of money.  My husband no longer works so I am not sure we even have what is needed to close.  We are current and have never been late on payments.  We do have a large debt to income ratio but I make enough to cover it so it hasn't buried us yet.  I figured I would start with our current lender, Chase, but have not heard anything back.
  • November 21 2012 - Hoschton
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Answers (1)

You first question should be if Chase will credit qualify you on a fha streamline. If the answer is yes then from what you described above you will not qualify for a streamline.

Additionally since your fha loan was endrosed before 5/31/2009 your upfront MIP will basically be nothing. Additionally your monthly MIP will remain the same or if it has been removed already will remain the same. With a lender credit you will not have to come to the table with any money, and it can go to cover your prepaids as well.

If you are sick about starting over on a 30 year loan, simply figure out the payment on a 20 or 15 year and pre pay the mortgage each month. It will have the same net effect.

Bottom line at 6.375% you can easily reduce your interest rate down to 3.25% and not increase your loan balance 1 penny.

This is a no brainer, if Chase will ask to credit qualify you then call someone who will not credit qualify you [Phone removed by Zillow moderator. Please see our Good Neighbor Policy for more information.]
  • November 21 2012
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