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Refinancing out of 203K loan

We took out a 203K loan for our house in July 2012. We're looking at refinancing to get rid of the ridiculous FHA insurance premium and we're not sure if it's even an option for us as it stands now. Right now we owe $205k on the house, and comps are selling in the $240-260 range, so we're right in the fringe of that 80% LTV range. Both of our credit scores are in the high 600's (670-680 last we checked). The interest rate on the loan is 3.875%.

Are we in range for a refi or still need to do some work getting our credit score and/or the house value up?
  • August 08 2013 - East Bridgewater
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Answers (7)

You can't get rid of FHA Mortgage Insurance MIP for a minimum of 5 years regardless of LTV.  They just changed this rule but at the time you took out the mortgage that was the rule.  The lender will not be able to remove it even if they wanted too......Sorry!
  • August 09 2013
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In the end with the rate increases that are happening, you may be better off staying where you are. I would contact your previous e lender and see if there is a way to eliminate the insurance at some point.
  • August 09 2013
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Some good advice so far from the others.  You may want to get a free line of credit now.  You can use this to make up the difference if you don't have 20% equity.  This way you can get around the mi issue.  Credit review to see how to raise those credit scores may help too.

  • August 08 2013
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You are definitely in the range to refi.  You would very likely be able to eliminate your MIP (The "ridiculous FHA insurance premium you mentioned :-) ) Message me to take a look.
  • August 08 2013
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Profile picture for pabloklaat
HI, first of all - congrats on doing the 203k loan.  I hope you achieved your renovation goals on your home.  Now what?  There would be an option to refi into a conventional loan. Most likely, you would need some type of mortgage insurance(PMI) because of the loan balance relative to your property value, known as LTV.  The best solution is a program which offers a single premium mortgage insurance versus a more costly monthly mortgage insurance.  So if you are looking to maximize the savings, drop me a line and I can put you in touch with someone who can get you what you need.  Cheers!
  • August 08 2013
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You could refinance now if you wanted into a conventional loan.  Your credit score is going to hinder the rate that you get.  Depending on why that credit score is where it is at, you may want to wait.  Important to talk with a mortgage professional and see your options.  If you would like to contact me through my profile, I can put you in touch with someone in my group to help
  • August 08 2013
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Profile picture for chrisjonesmtg
I think you are in the range to consider refinancing to conventional...Most 203k loans get paid off earlier because of the appreciation realized in the repairs and improvements to the property.  I would explore conventional financing.
  • August 08 2013
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