Should I refinance my FHA home loan now or wait? With today’s values on where they are NOW, the time to refinance is now. We are starting to see some weaking in the housing market here in Southern California.
You may not have the equity in your home in 90 days to refinance out of your current loan to remove the mortgage insurance or pull some cash out to payoff your high interest credit cards or do some home improvements to increase your home’s value. Waiting can cost you that small window of opportunity to refinance, explore your options now before the value is no longer there or the rates increase where there may not be a benefit to refinance into a lower rate.
Right now is to perfect time to refinance, I have conversations with many local loan officers and real estate professionals who mention that their appraisals are coming in much lower than the agreed upon purchase amount or the appraisal did not come in at value needed to refinance an existing FHA home loan to remove the monthly mortgage insurance.
Do not delay, at least discuss call me to discuss your options about refinancing today verses 90 days down the road, 90 days may be to late. Just in the past 90 days, I have had the privilege in assisting numerous home owners to refinance their home to remove the FHA mortgage insurance and pull cash out to payoff debt and lowering their overall mortgage payment or I have kept their payment the same. We have refinanced the current FHA loan into a Conventional loan and kept the payment the same, what we did was replace the mortgage insurance payment and exchanged that payment with cash to payoff debt or do some home improvements.
If you purchased a home utilizing the FHA home loan and if the FHA case number was issued after June 3rd 2013 and you put less than 10% down payment, that mortgage insurance will remain for the entire term of the loan, I can not image paying mortgage insurance for 30 years when it can be removed now.
What I have been comforted with in the past 90 days has been with exiting homeowners is, the interest rates today are higher than they we last year when they closed escrow. Very true, but with the principle, interest and mortgage insurance payment which will remain at the same payment for 30 years, with a refinance at a slightly higher interest rate, your over all payment will be lower than what you are current paying.
Also, the home owner will exchange the FHA monthly mortgage insurance with cash in hand. Like most homeowners purchasing a home, comes with new furniture and the typical way that a new home owner purchases those items are, with their high interest credit cards. What I have discussed with the homeowner is lets pull the cash out of the home (if the value is there to do so) and pay off those credit cards and still keeping the over payment lower if not the same depending how much cash is taken out of the home.
The FHA home loan program played a key role on you purchasing a home, but now that you may have the equity to refinance into a long term home loan program, do it before it is not available to do so. It does not hurt to explore your options, do not delay on this, it could cost you thousands of dollars of the life of your FHA home loan.
I welcome the opportunity to review your refinance options and present numbers for you to review, connect me at 909-503-5600 or email me HERE.
by Nathan Rufty