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Is my FHA streamline refinance worth doing ??

Current loan is at about $410,000 with a 4.875 interest rate and a 1.25% MIP
I'm being quoted a new rate of 3.25% but the MIP would go up to 1.75%   The agent is claiming no closing costs or out of pocket expenses,   what do you guys think?
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September 18 2012 - San Jose
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Answers (17)

It looks like your payment would go down by about $200 per month when you take principal interest and mortgage insurance into count.  Your current monthly payment is about 2390 (P&I 2206 + MI 184).  The new payment will be 2188 (P&I 1766 + MI 422).  Your upfront mortgage insurance will be about 7100.  You will break even on savings in 35.5 months or about 3 years.  If you plan on staying in your home greater than 3 years this is a good deal for you.  Keep in mind that your mortgage insurance will eventually disappear when you get to 78% LTV.  It will also adjust down every year based on your loan amount.  When you get to that 78% point you will be saving about 440 per month.  Long term this makes sense.  Short term it doesn't.
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September 20 2012
Bottom line its a good deal if you are saving the money.  The MIP wont be there forever.  I do these all day long, nothing added to the balance of the loan, no appraisal and no cost to the client
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September 20 2012
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Sorry that my original info didn't make sense,  I just added in the information needed last night.  should be more straightforward now.

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September 20 2012
User that is a horrendous structure to increase balance by 13000 and get an appraisal as well is completely unnecessary and even jeopardizes the transaction. Contact me through me my profile I'll show you the right way to this with similar rate and no increase to your balance and no appraisal required.
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September 19 2012
Good point Justin.
The OP's data doesn't make sense so we are all trying to guess what they really have
More accurate data is required!.
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September 19 2012
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the loan is from January 2011,  there is an appraisal required, it sounds like our loan amount will be going up to $420,000 at 3.25% from $407,000 as it stands today. 


Current monthly total with property taxes rolled in is $2951.75
my monthly MIP payment is $184
principal amounts to: $552
Interest around $1650
Escrow around $743

My rate now is 4.875% and we have paid the loan down from  $417,000 to $407,000

think that should be all the information you guys need.
It seems like with the amount that the loan is increasing by, i'm not sure if I stand to gain anything by completing this refi.
Thanks for the help!
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September 19 2012
Based on the 4.875% rate this loan should be at least 2 years old
( assuming a 30 Year Fixed ) .It would be helpful if the OP would come back on their thread and give some details. User, I agree with Justin that if you qualify then it's worth doing. You stated you are being quoted 3.25% and no closing costs and no out of pocket expenses. Do you know if this is a no appraisal streamline or with appraisal? If you happen to post again, state the amount of your principal and interest portion of your monthly payment, then state how much you pay each month for mortgage insurance, also the date this loan originated.    
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September 19 2012
I didn't misinterpret anything.I am am right, you are right but Justin said

"It can't possibly be 1.25 if you are eligible for streamline"

1.25 MMI Rate Began for Case Numbers after April 9 2012.   If you got a Case Number April 9 and closed in April your first payment due was June 1, 2012.

Streamline requires 6 payments made to be eligible.
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September 19 2012
What was the date you closed this loan?
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September 19 2012
LOL, then I misinterpreted...
I didn't get your statement that a refinance on a loan endorsed before June 09 was not a streamline.
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September 19 2012
I didn't misinterpret anything.I am am right, you are right but Justin said

"It can't possibly be 1.25 if you are eligible for streamline"

Which is not accurate .

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September 19 2012
Mark, you misinterpreted what Justin was saying, he is well aware the current annual MI rate is 1.25%.

"You can only keep your current MI if the current loan was started before June 2009. But that is not the definitiion of streamline"

Whether someone qualifies with their existing .55 MMI rate or the current 1.25% rate, it's still a "streamline".

The OP will qualify for a streamline using the current MMI rate of 1.25% if they are getting a note rate of 3.25% even if the UFMIP is financed and they are currently paying an MMI rate of .55 because they will qualify for the 5% fee test.
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September 19 2012

Last post is not quite accurate
1.25% is the new basic monthly MI for all FHA refinances whether or not streamline.
You can only keep your current MI if the current loan was started before June 2009. But that is not the definitiion of streamline

So in 7468's situation
UFMIP = 1.75% added to the loan or, hopefully, paid by a credit from the rate
Monthy MI = 1.25% unless the current loan was started before june 2009 in which case it will stay the same.

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September 19 2012
More important is your current MMI (monthly insurance) rate. It can't possibly be 1.25 if you are eligible for streamline. If you get a lender credit to pay your new UFMIP and all your closing fee then the amount of UFMIP being paid with lender credit isn't a factor specifically as it pertains to determining if the loan is "worth doing". In my opinion, almost every Streamline loan that meets the benefits test is worth doing if it meets the benefits test and is structured properly.
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September 19 2012
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I have the same issue. My loan is 97k with a current rate of 5.25. My loan was underwritten on Sept 2009 so my PMI will increase. I was quoted a 3.25 rate with no closing fee or other expense which will save me about $100 on my monthly payment. I can use that saving but I don't know if this really worth it. Any advice will be truly appreciated. Will they extend that cut off date from June 2009 to a later month and I will lose my chance?  Thank you!
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September 18 2012

Those numbers seem incorrect
The upfront MI will be 1.75% but that should be paid for with a credit from the rate  (together with all other costs)
the new monthly should  be 1.25% - what is your current monthly?

A streamline refinance is not even possible if your payment does not go down by 5% - but you have to be careful because your tax deductions might go down as MI is not always deductible compared to the regular interest

Make sure nothing is being added to the loan (unless you want it that way) especially any new up front MI

Get another opinion from another local broker

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September 18 2012
the 1.75% is the new up front MIP so that is a one time cost at the beginning of the loan.

when did you take out the loan? if it was prior to June 2009 i would say its worth it since you are still grandfathered in the old monthly mortgage insurance. if you are subject to the new mortgage insurance rate from where you were at its going to eat up a lot of your savings from the lower rate.

you need to save at least 5% in monthly payment for the streamline program to even get approved. there is probably still some payment savings to make it worthwhile but the true benefit will be based on the what the difference is between the monthly mortgage insurance rates

let me know if you have anymore questions
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September 18 2012
 
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