U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 03-28-2012, 07:17 PM
 
1 posts, read 3,192 times
Reputation: 10

Advertisements

My wife and I have an opportunity to refi on our house that we've owned for 4 years this April. Our original mortgage is FHA and locked in at 5.85% with APR at 6.0. We have an opportunity to lock in at about 3.85% I know this is a no brainer but I really do need a boost of confidence to do this. My wife and I are both employed however we are caring for a family member who is medical dependent. It's hard sometimes to look at financial advantages when you have to lay out money to do so.


We purchased the house in Apr-08 for $344K. My house is currently underwater by alot. Zillow lists it at $195K but I'm guessing market price is more like $240-250k. Still gulp! Interviewed with a broker last night who thinks we can get down to 3.80% (today it's 3.85). Our current monthly is $2729. $2033 for the mortgage, $566 for the taxes and $130 for PMI.


My wife and I are both employed, make about $140K, we owe $328K left on the mortgage. Our scores range from 692-727. The problem is we've made a bunch of necessary repairs to the house (just spent $5,000 on a new furnace) Our savings is down to $12K. The one good thing is we have very little debt. About $3500 in revolving and one car payment per month at $400. Our Debt to Income with the new mortgage is about 22%.

According to a prelim GFE our closing costs on a Streamline FHA are around $9K. New title is listing at $2000, deposit for escrow $4500, Transfer tax-$2500, PMI upfront $3300, all equal to $9102. The additional catch is that we are locked back into PMI for 5 more years and the rate is higher than when we close. About $277 per month versus $130. My mortgage principle is only reducing from I know I need to think long term but the thought of depleting my account $10K in closing to save maybe $200 per month over the next 5 years is not as terrific as I previously thought.

By all accounts, closing costs ($9100) + additional PMI ($15,326) what am I really saving? How much of the closing costs will come back to me either in previous escrow credit and how much of the closing costs can I deduct from next years taxes.

Old Mortgage Payment
P&I $2066
PMI $135
Taxes $586
Total- $ 2787

In one year Payment will be $ 2652

New Mortgage Payment
P&I- $1559
PMI-$277
Taxes- $586
Total- $2422 for 5 years

Closing costs:
Origination: $725
Mortgage Insurance Premium-$3284
Title Services & Insurance- $715
----------------------------------------
Homeowners Ins- 4months-$328
Property Taxes 8 months- $3896
Recording Fees to County $400
Transfer Taxes- $2650
___________________________________
Total-$9102.72

So if I understand this right, I am spending $25,000 on closing costs and additional PMI (and adding 4 more years of P&I) to save only $15,480 in P&I and extend my mortgage 4 more years.

How does this sound like a good deal?
Rate this post positively Reply With Quote Quick reply to this message

 
Old 03-31-2012, 04:30 AM
 
Location: Denver
3,211 posts, read 7,841,816 times
Reputation: 3135
Looks like the refi rules are changing...for the better.

FHA Streamline Refinance Costs to Drop
Rate this post positively Reply With Quote Quick reply to this message
 
Old 04-02-2012, 07:59 AM
 
Location: Lending in all 50 states
189 posts, read 747,259 times
Reputation: 109
Quote:
Originally Posted by Scala2112 View Post
My wife and I have an opportunity to refi on our house that we've owned for 4 years this April. Our original mortgage is FHA and locked in at 5.85% with APR at 6.0. We have an opportunity to lock in at about 3.85% I know this is a no brainer but I really do need a boost of confidence to do this. My wife and I are both employed however we are caring for a family member who is medical dependent. It's hard sometimes to look at financial advantages when you have to lay out money to do so.


We purchased the house in Apr-08 for $344K. My house is currently underwater by alot. Zillow lists it at $195K but I'm guessing market price is more like $240-250k. Still gulp! Interviewed with a broker last night who thinks we can get down to 3.80% (today it's 3.85). Our current monthly is $2729. $2033 for the mortgage, $566 for the taxes and $130 for PMI.


My wife and I are both employed, make about $140K, we owe $328K left on the mortgage. Our scores range from 692-727. The problem is we've made a bunch of necessary repairs to the house (just spent $5,000 on a new furnace) Our savings is down to $12K. The one good thing is we have very little debt. About $3500 in revolving and one car payment per month at $400. Our Debt to Income with the new mortgage is about 22%.

According to a prelim GFE our closing costs on a Streamline FHA are around $9K. New title is listing at $2000, deposit for escrow $4500, Transfer tax-$2500, PMI upfront $3300, all equal to $9102. The additional catch is that we are locked back into PMI for 5 more years and the rate is higher than when we close. About $277 per month versus $130. My mortgage principle is only reducing from I know I need to think long term but the thought of depleting my account $10K in closing to save maybe $200 per month over the next 5 years is not as terrific as I previously thought.

By all accounts, closing costs ($9100) + additional PMI ($15,326) what am I really saving? How much of the closing costs will come back to me either in previous escrow credit and how much of the closing costs can I deduct from next years taxes.

Old Mortgage Payment
P&I $2066
PMI $135
Taxes $586
Total- $ 2787

In one year Payment will be $ 2652

New Mortgage Payment
P&I- $1559
PMI-$277
Taxes- $586
Total- $2422 for 5 years

Closing costs:
Origination: $725
Mortgage Insurance Premium-$3284
Title Services & Insurance- $715
----------------------------------------
Homeowners Ins- 4months-$328
Property Taxes 8 months- $3896
Recording Fees to County $400
Transfer Taxes- $2650
___________________________________
Total-$9102.72

So if I understand this right, I am spending $25,000 on closing costs and additional PMI (and adding 4 more years of P&I) to save only $15,480 in P&I and extend my mortgage 4 more years.

How does this sound like a good deal?
IT may make more sense for you to wait until June when FHA rolls out their new guidelines for streamlined refis. If you go with it now, you'll start all over with the monthly MI at about double what you're paying right now. If you wait, the upfront and monthly MI will be substantially lower.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Similar Threads

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top