Can my lender(B of A) be trusted?

[moneymaker]

Almost 3 years into a 30 year loan @ 4.875% with 3.5% down. At the time seemed like a great deal, but now I’m looking around to see if the grass is greener elsewhere. When I called BofA a couple months back was told by their loan person that I would probably never want to refi because of rate/higher MIP/can’t roll closing costs into loan/yada yada/ now I’m looking in the paper and see BluFi offering 30yr/3.5%/$1240 closing costs/@ 3.75% APR of 3.812% which looks pretty darn good to me. Would it be another tremendous hassle to refi with FHA? Thoughts?Experiences?

[bearishgurl]

Maybe a loan officer can chime in here but wouldn’t the amount of the new monthly MIP negate any potential savings in interest rate?

I’d rather keep paying the principal down (as you are) than throwing more (non-tax deductible for principal residence) MIP to the wind.

I’m afraid the up-front costs of a new FHA loan ALSO will cause your LTV to increase. Doesn’t FHA only allow about 103% LTV with MIP rolled in?

I think you may be stuck, TK. You have the option of waiting out the rest of this RE downturn with your current mtg and continue to maintain your property. Perhaps in the coming years you will qualify to retire your MIP.

see: http://www.approvedfha.com/fha-mortgage-insurance.html

to calculate what your new up-front and monthly MIP would be if you refinanced FHA

edit: the above post assumes you have purchased a residence with an FHA mtg in the last 8 years.

[moneymaker]

Yes bearishgurl I think you are probably right. I also forgot that our MI will be retired in a little over 2 years, assuming we have 78% equity at that time(I’ve got my fingers crossed, although the way things are going we will probably have to prepay quit a bit for that to happen). I think now MIP is over the entire life of the loan. So I guess we can’t take advantage of the excellent rates now either even though we are not under water, have 2 good incomes, have never been late and have excellent credit. Bummer. Well hopefully I can invest that money I would have otherwise spent on closing costs/20 year mortgage.

[bake]

FHA monthly MI has increased significantly in the last three years, here are today’s rates:

■15-year loan term, loan-to-value > 90% : 0.50% per year
■15-year loan term, loan-to-value <= 90% : 0.25% per year ■30-year loan term, loan-to-value > 95% : 1.15% per year
■30-year loan term, loan-to-value <= 95% : 1.10% per year Check your current MI threadkiller, I think you are at .55%? Sounds like it would not make sense at today's rates unless you want to go into a 15 year or pay the loan down to get rid of MI.

[moneymaker]

Thanks “bake” guess I’ll stick it out and count my blessings as I don’t have $38K laying in a bank account earning almost no interest right now.

[bake]

my pleasure sir

[AK]

The FHA MIP increase is soooooooo unfair considering that current/recent borrowers are paying off FHA’s losses from bubble-era fraud …

It may be some consolation that your house may be paid off before Lee Farkas of Taylor Bean Whitaker gets out of federal prison.

[Author]

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