Get out of FHA for conventional mortgage to remove PMI.

[NotBadForADad]

I now have enough equity in my house to remove my PMI on my FHA loan.

3.5% Interest Rate

$225,840.76 Current Balance

$1932 Monthly Payment

Is it worth the exercise to see rates on a refi to conventional?  (probably a higher interest rate).

[SweatingInAR]

I'm not sure what you mean by "worth the exercise." You could have looked up refinance rates just as easily as post here.

https://www.credible.com/mortgage-refinance

https://www.nerdwallet.com/mortgages/refinance-rates

[NotBadForADad]

I'm not sure what you mean by "worth the exercise." You could have looked up refinance rates just as easily as post here.

https://www.credible.com/mortgage-refinance

https://www.nerdwallet.com/mortgages/refinance-rates

Right. I went through some sites, and the calculations were coming out costing more, not only in monthly payments but also 10's of thousands in interest.

So I guess the answer is no, it's not the time to refi out of the FHA loan.

[BikeFanatic]

Are you able to cancel the pmi because you now have 20 % equity in the home? Can you just request that they remove it? I was able to avoid pmi by taking out a second mortgage but that was 15 years ago.

[NotBadForADad]

Are you able to cancel the pmi because you now have 20 % equity in the home? Can you just request that they remove it? I was able to avoid pmi by taking out a second mortgage but that was 15 years ago.

No. When I called they said the PMI stays on for 11 years. My only option is to continue, sell, or refi.

[BikeFanatic]

Wow how much is that pmi? I would say keep shopping for a low rate, maybe payback being less than 11 years or how much more you have left from the start.
Another thing still 5 years ago, I paid off my house with a 5.5% interest rate and then got a line of credit or a home equity loan, at 3.5%

[NotBadForADad]

Wow how much is that pmi? I would say keep shopping for a low rate, maybe payback being less than 11 years or how much more you have left from the start.
Another thing still 5 years ago, I paid off my house with a 5.5% interest rate and then got a line of credit or a home equity loan, at 3.5%

It's $166 a month.

[six-car-habit]

 So you are saying that you have enough equity [ 20% or more ]  - but don't have enough time [ still have to pay PMI for 11 years under this purchase/ finance contract ] ?

  I had a loan yrs ago where i asked the bank to remove the PMI.   I had to get an current appraisal to submit to them to show the House value went up, and compared to the owed balance, showed less than 80% of the value still being owed.  Granted this was not a FHA mortgage.
     I find it surprising your contract specifies locking in the PMI payments for 12+ years. My understanding is that FHA backed loans are semi-subsidized by the Fed gov't with lower interest rates and lower down payment requirements in order to help the secondary [ already lived-in ] market move houses and bolster communities. Maybe this is how they shore up the various programs against default ?

 Anyhow, Reuters news site has an article today on the pace of home sales and mortgages, and they stated the conventional loan average rate was at 5.3% this week.

[economista]

So you are saying that you have enough equity [ 20% or more ]  - but don't have enough time [ still have to pay PMI for 11 years under this purchase/ finance contract ] ?

  I had a loan yrs ago where i asked the bank to remove the PMI.   I had to get an current appraisal to submit to them to show the House value went up, and compared to the owed balance, showed less than 80% of the value still being owed.  Granted this was not a FHA mortgage.
     I find it surprising your contract specifies locking in the PMI payments for 12+ years. My understanding is that FHA backed loans are semi-subsidized by the Fed gov't with lower interest rates and lower down payment requirements in order to help the secondary [ already lived-in ] market move houses and bolster communities. Maybe this is how they shore up the various programs against default ?

 Anyhow, Reuters news site has an article today on the pace of home sales and mortgages, and they stated the conventional loan average rate was at 5.3% this week.

FHA loans do allow lower interest rates and down payments comparable to conventional loans, but the kicker is that you cannot remove PMI without refinancing. It's one of the big pitfalls with the program and it used to be worth it for people when most conventional loans required a minimum of 5-10% down, but now that you can get a conventional loan with only 3% down it's usually better to skip the FHA option.