Should I Streamline My 5% FHA to 3.75% (California)? (appraisal, 3%, mortgage)

[KabawL]

I purchased a home 3 years ago @ $221,990 at a 5% interest rate putting 3% down for an FHA loan. Currently I am paying $1610.00 (home insurance, property taxes, and mortgage insurance included) to Bank of America.

Would it benefit me to streamline from a 5% interest rate to 3.75% going from a monthly mortgage payment of $1610.00 to $1530.00?

It's an $80.00 difference.

My new loan would be around $214,000, no money out-of-pocket.

If so, how does it benefit me (or not)? How long would I have to stay in this house for it to be beneficial?

Also, I was informed that mortgage insurance went up with FHA loans. Instead of the $99.00 I'm paying now, with this new monthly payment, its going up to $200.00. Does the same thing apply as conventional loans where "mortgage insurance" is paid until 20% of the loan is paid off?

Thanks.

[Enkiktd]

I believe that if you do the streamline refinance the 5 year timer for the mortgage insurance will start over since it's technically a new loan.

If you can streamline into a 15 year loan and have over 22% equity on the property, that may be the way to eliminate your mortgage insurance, but then your payments might not be affordable for you.

[NinaN]

Unfortunately, prices have come down in the last 3 years. Your specific local market may be different, but a new appraisal is required and you may no longer have the 3% equity required to refinance. You might check with a local realtor to get their opinion.

[fallingwater]

Originally Posted by KabawL

I purchased a home 3 years ago @ $221,990 at a 5% interest rate putting 3% down for an FHA loan. Currently I am paying $1610.00 (home insurance, property taxes, and mortgage insurance included) to Bank of America.

Would it benefit me to streamline from a 5% interest rate to 3.75% going from a monthly mortgage payment of $1610.00 to $1530.00?

It's an $80.00 difference.

My new loan would be around $214,000, no money out-of-pocket.

If so, how does it benefit me (or not)? How long would I have to stay in this house for it to be beneficial?

Also, I was informed that mortgage insurance went up with FHA loans. Instead of the $99.00 I'm paying now, with this new monthly payment, its going up to $200.00. Does the same thing apply as conventional loans where "mortgage insurance" is paid until 20% of the loan is paid off?

Thanks.

I am in the same boat. I get stuff in the mail almost everyday. I contacted my credit union because they now do FHA loans. The loan officer told me about the new FHA rate increase. She said that I would save about 78 dollars a month if I refi. She said value might be an issue and I would need a realtor to pull comps for me. She said that if I plan to stay in the house for at least 5 yrs it should pay for itself. Although there will not be any out of pocket costs, the closing costs would be rolled in increasing my balance. This is where the issue of not staying in the house long enough comes in. She said it was up to me as I would have a savings but told me if the rates dropped to 3.25% it would be a no brainer. I asked her what the chances of that was and she said she had no idea but never thought the rates would be 3.75. So I dunno. My husband and I are still thinking about it. We don't have any plans to move until our son graduates from HS and that is another 4 yrs off. I just don't like the idea of adding more onto the balance of our loan as real estate is only dropping in value.