Hi all! DW and I have a FHA loan at 3.75% fixed. PMI is on it for life in FHA and I want to get out of it.
From my understanding there's no way out of PMI in an FHA loan. Is that correct?
If we look into refinancing is the 20% equity from the original loan balance or current appraised value?
Thanks!
I am in this same situation. Have an FHA loan with over $100 in PMI a month. I have only owned it for 5 months, and starting explore refinance options.
- You can refi to a conventional loan if you have 85-90% LTV. You will still carry PMI, but it will drop off when you hit 80% (or there abouts). From the quotes I received most PMI on conventional were cheaper than FHA. Instead of 100+ i got quotes for $60-90 a month. Even if you interest rate is a bit higher it will likely end up cheaper in the long run (lower PMI with eventually no PMI).
- I found out if you have owned the home for less than 6 months (sometimes a year) the appraised value is the purchase price. Only after a 6 months can you get a revised appraisal. So I need to wait a few more months to get a reappraisal and hopefully better LTV.