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Want to refi my FHA Loan. Help Needed

All - I bought a new house in Phoenix/Chandler for $260K in Jan 2010. I paid 3.5% down and got the FHA loan @ 5.125% for 30 years fixed. I was thinking of refinancing the loan considering the interest rates are down. I contacted by BoA loan officer who gave me a rate of 3.25% for 15 years fixed which would take my monthly payment (P&I+Insurance+PMI+Tax) from ~$1700 to $2000. But when the underwriter looked at the loan documents, she declined it saying that FHA can not be refinanced from 30 year to 15 years. I read through other discussions on this forum and looked like HUD had a rule change in Dec 2010 which wont allow refi from 30 year to 15 year. So, what are my options? Is paying down 20% and converting the FHA to conventional loan the only good option? Thanks in advance.
  • May 29 2012 - Ocotillo Lakes
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Answers (2)

You could also refi into another FHA loan 30 year fixed rate at about 3.75%.   You could always make extra payments to pay off the loan at a faster pace.   The rate isn't as good as the 15 year fixed rate, but it is a heck of a lot better than your current rate.

If you have the money to pay down the balance under 80% of the appraised value, then I would do that to avoid mortgage insurance alltogether.

I doubt that money is doing much for you right now anyways since interest rates are so low on savings or CD's and the stock market is so volatile. 
  • May 29 2012
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You can do a streamline from a 30 Yr to 15Yr if the new payment is 5% less, it should not have been submitted to underwriting if the payment went up $300. There is nothing stopping you from doing a full doc 15 Yr FHA
( with appraisal ) loan if you qualify and you have 2.25% equity, do you?  
  • May 29 2012
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