I can't decide, which rate?? (PMI, loan, interest rate, credit)

[darrell2525]

I can't decide which mortgage to pick here is the scenario. I really want 15 year loan.

Current Loan I am paying
Amount $148,650 FHA
Interest Rate 6.130 %
P&I = $958.42
Origination Year Aug 2008
Loan Term 320 months remaining
Current House Value: Zestimate®: $136,039

My refinance options from (better compared to Chase options) Southern Funding Alliance USA, LLC :

30year FHA – 3.25% - $2235.00 / credit
new loan - $154,200 (I need to verify why this not near current balance of 148.6k)
P& I - 671.16
PMI –70.68
Cash to close – about 850.00

15 FHA – 3.125% - $0 / credit
new loan - $154,200 (I need to verify why this not near current balance of 148.6k)
P& I - $1074.17
PMI – 70.68
Cash to close – about 3700.00


or I can refinance to conventional at :

15 – 2.875%
new loan - current balance - how ever much I put down (this depends on the appraisal value)
P& I - $910 (highly depends on what appraisal value of home comes in at.
PMI – 70.68
Cash to close – $13.5k to $15k

The first two or FHA Streamline, so no home appraisal required and clearly I will be saving about $100k and hardly no money down. I can choose the 30 year and just pay extra payments per months to pay off the mortgage in 15 years.

To get the conventional loan my LTV needs to be at or below 95%. Currently according to Zilliow I am at $136k. Current balance at $148.6k. The mortage guy says, to get the 2.875 (or lower), I need to be ready to pay about $15.k at closing, if appraisial comes back at $140k (he thinks Zilliow is a bit off scale). But I will still have to pay that PMI until LTV is less than 78%.

I am not sure which route to go

[darrell2525]

Originally Posted by darrell2525

I can't decide which mortgage to pick here is the scenario. I really want 15 year loan.

Current Loan I am paying
Amount $148,650 FHA
Interest Rate 6.130 %
P&I = $958.42
Origination Year Aug 2008
Loan Term 320 months remaining
Current House Value: Zestimate®: $136,039

My refinance options from (better compared to Chase options) Southern Funding Alliance USA, LLC :

30year FHA – 3.25% - $2235.00 / credit
new loan - $154,200 (I need to verify why this not near current balance of 148.6k)
P& I - 671.16
PMI –70.68
Cash to close – about 850.00

15 FHA – 3.125% - $0 / credit
new loan - $154,200 (I need to verify why this not near current balance of 148.6k)
P& I - $1074.17
PMI – 70.68
Cash to close – about 3700.00


or I can refinance to conventional at :

15 – 2.875%
new loan - current balance - how ever much I put down (this depends on the appraisal value)
P& I - $910 (highly depends on what appraisal value of home comes in at.
PMI – 70.68
Cash to close – $13.5k to $15k

The first two or FHA Streamline, so no home appraisal required and clearly I will be saving about $100k and hardly no money down. I can choose the 30 year and just pay extra payments per months to pay off the mortgage in 15 years.

To get the conventional loan my LTV needs to be at or below 95%. Currently according to Zilliow I am at $136k. Current balance at $148.6k. The mortage guy says, to get the 2.875 (or lower), I need to be ready to pay about $15.k at closing, if appraisial comes back at $140k (he thinks Zilliow is a bit off scale). But I will still have to pay that PMI until LTV is less than 78%.

I am not sure which route to go

NEVER MIND, going with the FHA 30 year and will make extra payments to be done with mortage in 15 years.

[yousah]

Excellent idea. It's always nice to have the option of a lower payment with the 30-yr mortgage should your financial situation change; yet be able to basically make it into a 15-yr mortgage by making extra principal payments.

It's usually a good idea to make two separate transactions (either two separate checks or two separate online payments) so as to distinguish between your note payment amount and the separate payment for principal.

There have been many cases where a lender has taken that additional money and applied it towards future payments rather than principal reduction.

[snowdenscold]

Originally Posted by yousah

Excellent idea. It's always nice to have the option of a lower payment with the 30-yr mortgage should your financial situation change; yet be able to basically make it into a 15-yr mortgage by making extra principal payments.

It's almost the same, but you'll have a higher interest rate w/ the 30-year.

For example, if you took a 30 year at 4%, but paid a monthly amount equal to the payment for a 15-year at 3%, it will take you 16.5 years to finish your mortgage.

Obviously that 16.5 years gets bigger or smaller relative to the difference in rates between 15 and 30 year terms.

But yeah, I could buy the argument that even taking 16.5 years instead of 15 is worth it due to the flexibility and lower risk you gain with the lower monthly payment.