Refinance of FHA loan (PMI, interest rate, escrow, fees)

[hvakharia]

I want to refinance FHA loan on which I am paying MIP. This loan was taken about 4 months back and I didn't have enough liquidity to paydown 20% at that time. Now I have some liquidity and was wondering whether it is possible to paydown to bring LTV to 80% and go for conventional refinancing so that I can get rid of MIP. My appraised value was more than my purchase price and whether lenders can consider appraised value to determine LTV.

[snowdenscold]

If you don't want to go through the hassle of refinancing so soon (I don't know all the details on the terms, but you said you just closed 4 months ago), and have you capital to put at the house, you can always just pay down your principal and then request the PMI to go away w/o doing a re-fi.

I believe at 80% LTV you can ask them to recalculate and remove it if they verify. Depending on how similar your interest rates would be, that's an alternative to look at.

[Debsi]

FHA loans have to be seasoned 5 years to remove monthly MIP.

[snowdenscold]

Ah good point - I overlooked he/she said it was an FHA loan. Re-fi then may be the only option.

[Modification Specialist]

Originally Posted by snowdenscold

Ah good point - I overlooked he/she said it was an FHA loan. Re-fi then may be the only option.

My advise is to wait it out and refinance later. If you tried to refinance now, it would be poor financial management (you'd be wasting a lot of money). You need to compare what you are going to spend for the PMI, vs the $1000's in new closing costs.

Call your bank and ask how many payments do they require till you can do an in-house refinance, wanting to do a refinance from your FHA loan into a conventional loan.

If you refinance with another lender, new appraisal, see origination fees, new title, taxes and escrows,... Staying with the same lender, any closing costs are minimal.