I currently have a condo in Jefferson Park that I bought in 2008. I originally got the loan through BoA using their "No Fee Mortgage Plus" program. I didn't find out until very recently that the loan had LPMI - this was never disclosed to me verbally nor was it part of any of my loan documentation. The value of my condo has dropped sharply since I bought it, too. I'm probably about 70k underwater. This, combined with the LPMI on my loan, made it very difficult to find anyone willing to refinance. Eventually, BoA was willing to do the refinance in October 2012, but I had to agree to an FHA loan with a 4.25% rate - higher than what I was hoping for, though it still saved me about $300 a month versus my old mortgage.
Now, I'm looking to move. Ideally, I'd like to move into a single family home in the North or Northwest suburbs. I've crunched the numbers, and I think I can afford a home up to about $600k. My credit rating is excellent, I've had a stable job for almost 10 years, and I have enough cash at hand for around a 10% downpayment with about a year of PITI. I think selling my current condo is pretty much out of the question, though. I'm fairly certain that I'll need to rent my current condo. So, with all of this in mind, I had a number of questions:
- Are there lenders out there who would refinance an existing 4.25% FHA LPMI loan down to 3.25-3.5%? Or does the LPMI really preclude this from being a realistic option?
- In order to get the rental income for my current condo to count towards my monthly income, what do I need to do? I've been trying to find some information about this on the internet, and I'm reading a lot of conflicting information. Some say I need a signed lease with at least 1 year's worth of documented rental income. Others say I just need a signed lease with a security deposit. Most, however, agree that only a portion of your rental income gets counted. Usually 75%. What's the real story here?
- Assuming that I do qualify for a $600k home, that puts me into "jumbo loan" territory. I've read that you'll typically get much better rates if you split that into two different loans with each loan below 417k confirming loan limit. What are the typical "hidden" costs associated with this sort of loan arrangement over a jumbo loan? And is it possible to get these loans without a PMI if I have less than 20% down? I've heard of things like SFMI, SPMI, etc... but I don't really know how to qualify for them.
Thanks in advance to any who can help answer any of these questions!