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)
DIVIDED BY $125 PER MONTH SAVINGS
$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.
From my experience with 203k loans, the best advice is to use a lender that offers assistance via third party with 203k processing.
This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.
Also, be careful about rate quotes when there is no APR associated with it. It's not only misleading, it's also illegal.
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.
Home Mortgage Consultant
(415) 271-7740 direct/cell
This doesnâ€™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 wonâ€™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 wouldnâ€™t even be worth running the numbers.