Author Topic: Question About Refinancing from FHA  (Read 901 times)

jwood83

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Question About Refinancing from FHA
« on: March 16, 2015, 09:59:22 PM »
I searched this question and did not find a definitive answer as it pertains to my situation, so I decided to reach out and ask for a pinch of advice.

I bought my home 2 years ago as a foreclosure. Besides a small plumbing leak in the PEX line and it needed a few drywall patches, it was in great condition (we're in a garden home neighborhood). At the time, we did not have much for a down payment, so we went FHA and I put $5K down on the home (we bought it for $125,000). Interest rate is 3.5%, and we owe about $115,000 now.

We added a fence around our property, new kitchen floors, disposal, and I built a small office in the upstairs of my detached garage. Our recent appraisal was $165,000, which is in line with the other home properties in the neighborhood, give or take $10k (depending on the model).

Of course, being that it's FHA, we're stuck with that nasty PMI. I believe the regulations are that it lingers for 5 years before it's gone (assuming the LTV is 78% or below, which ours already would be). I was considering refinancing to eliminate it, but I am poor at math (and limited in my knowledge of the mortgage industry), and did not know whether the refinancing fees would be worth paying it for the next 2 years. It's $120.00 a month for the mortgage insurance, which seems ridiculously high.

And if we do refinance, what fees are there? Do they get tacked back onto our monthly bill?

Even if we are stuck with the PMI, is there at least a way to lower it? We're financed through Wells Fargo, and their customer service and "mortgage specialists" were not much help.

Thanks in advance!