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October of 2013 I bought my first house with an FHA loan of 100,000 at 4.25%. My current principal balance is $89,959.45. I'd like to get rid of the $101.88 monthly PMI payment. I see this is very complicated! My loan owner, Quicken, has offered to refinance it out in the past but that would require a down payment. Wouldn't that just be a wash then? Am I understanding this right? I'd love to reduce my monthly payments but don't want to spend money to save $ if it doesn't make sense. Help. Thank you!!
asked Nov 18, 2017 in FHA Loans by Rebecca L

1 Answer

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Do you know your current home value? For instance, if it were around $119,000 you could refinance into a standard conventional loan at 80% loan-to-value, get rid of mortgage insurance, and wrap in just about all the closing costs into the new loan. (119k X 80% = $95,000 -- your potential new loan amount). It's very realistic that the home has gone up 20% in value since 2013. The first step I would take is get an estimate of value from a local real estate agent who knows the area. Sometimes they will do this just to earn a potential future client. Their estimate could be fairly close to what you would get with a full appraisal, but at no cost. If value is around $119k, just do a standard conventional loan refinance.
answered Nov 18, 2017 by TimLucas (10,040 points)

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