I want to refinance from a conventional loan to an FHA loan.

eenorman2000 · Joined: 19 Feb 2008 Posts: 1 1.46 Dollars($)

I am buying a home using a conventional loan due to the FHA limits. When they increase, I will be able to go FHA with a lower interest rate. Is it possible to refinance with in the first two months of the conventional loan? Is it possible to finance into the FHA loan any closing cost?

larry · Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)

Hi Eenorman,

Welcome to the forum.

I think it is not possible to refinance just within two months after taking the loan. After at least 12 months you can refinance the mortgage. Regarding closing cost you need to negotiate with the lender and the lender may include the closing cost within your finance.

Feel free to ask if you have any further questions.

Thanks,
Larry

gmakerley · Posted: Tue Feb 19, 2008 2:40 pm Post subject:

as long as you are only refinancing as a rate/term transaction (no cash back), i dont see any limitation on the duration you have been an owner.

there must be a tangible net benefit to you in order to refinance, however. i presume that there would be, else you would not likely be here asking. closing costs may be included within the refinance amount.

brad · Posted: Tue Feb 19, 2008 2:47 pm Post subject:

If you take an FHA loan you would most likely be paying more closing costs. With FHA loans you have to pay mortgage insurance and upfront mortgage insurance can be financed. The upfront mortgage insurance is 1.5% of your loan amount.

banker0679 · Posted: Wed Feb 20, 2008 1:09 pm Post subject:

There is no time limitation for FHA, but they will use the purchase price as the appraised value. You can refinance rate/term at 97.75%, and roll in the closing costs if the LTV allows this.

I would wait to see how the loan limits change within the new couple of weeks. Bush has signed the Economic Stimulus Act which will affect all FHA loan limits. The new bottom limit should be in the 270k, and the high limit will be 729k. HUD has 30days to change the Median Prices from when Bush signed the Act (Feb 13).

brad · Posted: Wed Feb 20, 2008 1:23 pm Post subject:

Today I have heard from a few different FHA lenders that I do business with that the new loan amounts will be rolled out on March 1st. Also they are now offering FHA loans up to 98.75% so you only have to put down 1.25%!!

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

Hello eenorman2000,

FHA usually has more closing costs and in many cases, a higher rate than a conforming loan. Is there a reason that you would like to get into an FHA loan?

brad · Posted: Thu Feb 21, 2008 6:15 am Post subject:

Lisa,

I don't mean to be argumentative but I would like to see what FHA rates are higher than conventional? Every lender i deal with the FHA rates are at least .50% better than conventional?

banker0679 · Posted: Sat Feb 23, 2008 9:22 pm Post subject:

FHA rates are currently about .25-.375% lower than Conventional mortgages. The FHA appraisal maybe 50-100 bucks higher, and you will need to pay a 1.5% funding fee. The monthly PMI payments are a lot lower than conventional mortgages.

If you have a credit score less than 680, and less than a 5% down payment, then FHA will be a good program.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

FHA is lower if they only have 3% down. But with 5% down, FHA has always been slightly higher than conforming.

banker0679 · Posted: Sun Feb 24, 2008 8:25 am Post subject:

Lisa...the only way conforming is 'lower' in rate is if it's LPMI. Lender Paid PMI
I'm looking at the rates now, and even with 20% down the FHA rate is better.

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