Financing in Oakland>Question Details

Mario , Home Buyer in San Francisco County,...

Is it worth it to do an FHA Streamline on an existing FHA loan?

Asked by Mario , San Francisco County, CA Thu May 17, 2012

We are at a decent rate, high 4s, but rates have dropped to lows. At the same time, MIP is up ours is a newer 2010 loan so, we don't get the reduced MIP as of March 2012) with closing costs, it was hard to determine how much we'd save. We actually started to explore with a large bank and got lots of mixed signals from within. Does anyone have a good tool, or guidance on figuring out if this is worth it?

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Claudia Muller Gravelle’s answer
To calculate whether or not it is of value for you to refinance any property, do the following:

TOTAL COSTS OF NEW LOAN (whether added to loan amount or paid in cash)

DIVIDED BY TOTAL MONTHLY SAVINGS (all PITI not just payment but mortgage insurance, as well)

This will give you the recapture time (number of months to recapture costs). If this number is in excess of 48 months this is not a savings to you.


$10,000 COST OF NEW LOAN (with points and MIP, etc)
$10,000/$125 = 80 months/12=6.7 years TOO LONG

Our underwriters will not allow a refinance to go forward unless their is a 36 month or less recapture period.

One more note: any lender who tells you 'and you get to miss a house payment' is misleading you. A 'missed' house payment is 30 days worth of interest that is being added to your loan amount and being financed over 30 more years.

FHA has made it very expensive to refinance. These loans are best suite for interest rates that are somewhere in the mid to high 5s and up.
1 vote Thank Flag Link Fri May 18, 2012
It's always worth it if it's going to give you any benefit whatsoever. Your best bet is to talk to Home Loans For All. I will include a link to their website.
3 votes Thank Flag Link Sat Jan 16, 2016
Based on the date of origination and you stating that you are in th e"high 4s", you would probably not benefit from a streamline refinance.

Also, be careful about rate quotes when there is no APR associated with it. It's not only misleading, it's also illegal.
Web Reference: http://WeFixRates.Com
1 vote Thank Flag Link Fri May 18, 2012
Hello Mario,

I specialize in the FHA Streamline Refinance. If your current lender pulled an FHA case # before the April 9 deadline....You might be able to save the Up Front MI increase. I usually cover the UFMIP and closing costs for all my Streamline clients but it can be costly. It all depends on your loan amount.
Today's rate is 3.75% for a Conforming FHA. This rate will includes a heavy credit...Almost 2%.

Please check out my blog on Trulia. I covered this back in April. If you want more information, please email me or call me. My contact info is below.

I can certainly guarantee you will be satisfied with our offer.

Warm Regards,

Ivan Diaz
Home Mortgage Consultant
(415) 271-7740 direct/cell
1 vote Thank Flag Link Thu May 17, 2012
If your case number was pulled after October 4, 2010 you have annual MMI of .9%; if it was pulled before that it is only .55%. Since it’s now 1.25% you will be increasing your MMI rate by either .7% of .35%. You will also be paying 1.75% MIP up-front to get the new loan, and your refund for your original MIP won’t be much. (It changes for every month you have been paying on the loan, but .5 would probably be optimistic.)

This doesn’t include any title, escrow or loan fees. I would need to put your numbers through my excel program I wrote to calculate savings, costs and amount of time needed to get back to even to really answer your question. My guess is it won’t be to your advantage regardless, but unless you are currently at the .9% MMI AND you have a loan amount of at least $250,000 it wouldn’t even be worth running the numbers.
Web Reference:
1 vote Thank Flag Link Thu May 17, 2012
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