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Rates are up today. Today’s comparison mortgage rates with no lender fees are 4.00 % on a 30 year, 3.375% on a 15 year and 3.125% on a 10 year. (click here for details)
Today’s topic is I got screwed! When is the soonest I can refinance my FHA loan?
This is a good topic and goes into the importance of making sure you are getting a great deal before you close on your loan.
Check out today’s video:
What happened was I speaking with Richard in Missouri who just closed on his loan a few weeks ago. One of his friends sent him a video a few days after he closed on his loan. He was unaware that his 4.25% rate was extremely high and he overpaid on his closing costs – Let’s just say he was less than thrilled.
So he immediately went into the “I want to refi” mode. This is all well and good. But just like most things mortgage related – It’s easier said than done.
FHA has some guidelines on when you can actually refinance. So let’s take a look at those first.
If you wanted to do an FHA streamlined finance with no appraisal – you would have to have made at least six months mortgage payments, and you have to wait at least 210 days before you can get a new case number, which you will need to do the refinance.
Now if you want to do a full rate and term refinance you can do that right away. However, you will need to document everything again along with a brand-new appraisal. The new appraisal could cause an issue with your LTV.
If you for some reason wanted to do a Cashout FHA loan, you would be limited to the six months payments and 210 days for the new case number. The max LTV on a cashout FHA loan is 85%.
Now I have no idea why you would be doing this option but – Hey, I am just letting you know.
So with those options in mind, the key to doing a refinance so soon is to do a break-even analysis to make sure refinancing is even a good option. It may sound great, but the numbers don’t always work out.
In Richard’s case, it did work in his favor to refinance due to the lender covering all his costs, and he plans to be in the house for a long time. So don’t be a Richard! Make sure you are getting the best deal BEFORE you close on your mortgage. Not after!
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PS. To ask a question, get advice, or find out if you’re getting the best deal possible on your loan, just post a comment below. Daily comparison rates, calculators, and other cool features are available in the free Rates in Motion LoanApp by going to your smart phone and clicking on this link, activation code is 9203780002