I currently have a $610k @ 4.85% conventional loan on an ~$850k value home. I had just missed the deadline to refinance this loan prior to the October 1st conforming loan limit drop (to $546k) in SD.
I’m still interested in seeing what good options I have to refinance my loan and wanted to know if there’s any good suggestions from fellow Piggs.
Some options I have considered:
1) $546k first loan and the remaining balance on an adjustable HELOC? I likely can pay the HELOC balance off in ~5-8yrs.
2) Can I do a no cash out FHA loan refi as I understand they have re-adjusted the conforming loan limits back up?
3) Do the waiting game and hope that conventional limits go back up?
$610K would now be a “jumbo” loan. How can you now get a $610K conventional loan at 4.85%? If you can, why refinance at all and pay closing costs?
Your interest rate is not that bad, considering the size of your mtg, IMO.
I would think the closing costs would be too high on an FHA refinance. Are you SURE your property will appraise for $850K (just under 72% LTV)? The FHA program now charges exorbitant up front and monthly MIP for mtgs where the LTV is higher than 78%.
If the FHA ceiling DOES get raised again, I guess you could have an FHA appraisal done and find out for sure for a few hundred.
As of last week, the current FHA 30-yr rate was just over 4%
All HELOCs have adjustable rates, mostly tied to the prime rate. You will be at that lender’s mercy if rates skyrocket. Not sure if annual caps are built into them but I don’t think so.
If I were in your shoes, I would leave well-enough alone (at least for the time being) but that’s just me.
You’re correct that a refi to a conventional loan would now be a jumbo – which would defeat the purpose of refi’ing. I’m just a bit miffed that I could have locked into a low 4% loan a couple months ago (I’m only 1 yr into my current loan).
About the FHA option. I’m reasonably confident that our property could appraise for $850. Is this option even worthwhile if I’m under 78% LTV? Especially given that the loan is assumable?
I’m completely with you on the HELOC adjustability which is why I’m apprehensive about that path. I do have leverage to pay that off in a pinch by selling off other assets if rates were to skyrocket.
I am currently leaving things as is, but thought there may be other options I’m not considering.
Here’s hoping that the conventional limits will go back up! Thanks for the input.
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