Profile picture for SwarthyDaisy

What am I gaining by doing a FHA Streamline Refi in Georgia?

What am I gaining by doing a FHA Streamline Refi in Georgia?  I had the house for about 8 years, 30 year fix.
  • June 04 2012 - Dallas
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Answers (9)

Profile picture for michaelmccollum
Clay is right about considering a 15 year given that you have been in the home as long as you have.  It's all about what you are trying to achieve - pay off earlier, conserve the most monthly cash flow, etc. 

You certainly can start the process of having a lender work up some numbers for you before the 11th.  Lenders pull a case number on new applications for FHA loans and the pulling of the case number is what you don't want to happen until the 11th in order to keep from having the current higher MI rate.

The other question that you should address is whether you have any equity at all in the property.  My guess is that the streamline is the way to go given the drop we have seen in values in GA, but since you've been in the home 8 years, there may be enough equity there to look at Conventional.  Jumping to a Conventional loan might be a good move if you were sure it would appraise high enough and you wouldn't waste the money on the appraisal. That's the beauty of the FHA Streamline.  You take that danger out of the mix.

Michael
  • June 05 2012
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Swarthy, Clay is very knowledgable on FHA streamlines and a longtime contributor to these advice boards. You should contact him and you will be in very good hands.
  • June 05 2012
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Profile picture for SwarthyDaisy
@Clay a 15 year sounds interesting too. I would like to go with the most cost effective option for sure. I will look into it.
  • June 05 2012
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Profile picture for SwarthyDaisy
@Rob, This would be my first refi. Ever. I didn't know that a 22 year option was available. That would be okay for me. I am not sure if I want to remain in the house that long. I do see myself living here for at least 5 more years. @Michael, I did hear about the update on the 11th. I wonder if I would still be eligible if I made the change this week.
  • June 05 2012
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You can probably qualify for a 15 Yr and drop 7 years of payments.
  • June 05 2012
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Profile picture for michaelmccollum
If you have been in the home that long, FHA is grandfathering you in on the monthly MI rate beginning next Monday, June 11th.  You should definitely do a cost/benefit analysis on any refinance, but at 6%, I can't imagine there isn't some benefit in a refinance for you.  I'm a local loan office in the Georgia market if you would like to give me a call.

Thanks,

Michael
  • June 05 2012
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When was the last time you redid your current loan, if ever?  Depending when you did it will determine how cost effective it is to refinance.  Also, how much do you currently owe?  The costs to refinance may reduce the benefit to you significantly depending how long the time to recoup the costs are.  Also, are you looking to extend your mortgage back to thirty years or keep the same term you have (I.E.  If you've had your loan for 8 years, do you want a 22 year mortgage on a potential refinance?)

I just did a cost analysis for a client yesterday and based on when they purchased/refinaced last and now and the costs for them to refinance based on their local market and the recent PMI changes for FHA loans, it was a very long break-even, longer than she was going to live in the house.

It's important these questions be analyzed first before proceeding or you may end up frustrated with little to show for.
  • June 05 2012
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Profile picture for SwarthyDaisy
I am still in the home at 6% interest.
  • June 04 2012
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Profile picture for michaelmccollum
The big advantage of an FHA Streamline in this market is that you don't have to have an appraisal.  There are others at it relates to documentation, but that's the main advantage.  What is your current rate and do you still occupy the home?

Thanks,

Michael
  • June 04 2012
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