Conversion from FHA to Conventional Loan for my first home I bought in Jul 09 with 5 % interest for 30 yrs. Will I get my Mortgage Insurance premium?

Asked by Devanandana Kamatham, Lakewood, CA Fri Mar 26, 2010

Hello, Thanks for reading my question.
I bought my first home in 2009 with FHA. Now I got appraised my home and it increased about 30 K in equity. I want to the following options
option 1: Refinance with little lower interest rate on conventional loan. I am not sure I will get my Mortgage Insurance Premium back that I paid to HUD.
option 2: Refinance to FHA loan and take the equity and buy investment property
Please advice.

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Roswell Moore,’s answer
Roswell Moore…, Mortgage Broker Or Lender, Scottsdale, AZ
Fri Mar 26, 2010
You received some good advice here, however, in the event you elect to do an FHA cash out refi, you will receive your MIP credit applied to your new loan to keep your loan costs down.

Also, please note that if you are looking to purchase an investment property, you will need a minimum down payment of 20% for a one-unit property.

All the best,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct
0 votes
Carl Henker, , 95928
Fri Mar 26, 2010
BEST ANSWER
You will not receive a refund of MI when you pay off your FHA loan using a conventional loan. You would receive a prorated refund of your MI if you stay with an FHA loan. However you are looking at rates above 5% today with cost I would not expect any benefit in refinancing at this point except obtaining some cash for investment.
0 votes
Ted Canto, Mortgage Broker Or Lender, Scottsdale, AZ
Fri Mar 26, 2010
0 votes
Ted Canto, Mortgage Broker Or Lender, Scottsdale, AZ
Fri Mar 26, 2010
Hi FHB,

You are eligible for a partial refund of the UFMIP.. Ensure that a proper appraisal has been conducted on your home before proceeding down that path. If it indeed has appreciated, great news for you. Not a lot of people can say the same. However be prepared to possibly come out of pocket to pay for your closing costs.

Once the refinance is completed, you need to wait a couple of weeks and then you can call FHA at 1-800-697-6967 and have your case number ready and they will process your refund.

Let me know if you need help on the refinance.

Good luck!
Ted Canto
Academy Mortgage
Web Reference:  http://www.tedcanto.com
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