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rotamgeo · Joined: 28 Sep 2008 Posts: 1 1.36 Dollars($)

I currently owe 97K on my 5.5% (30 year fixed) FHA loan.I've been in my home for 8 yrs. I want to purchase a 2nd home. I'm not selling my 1st home. A family member will live in it. Since I can't have two FHA loans my broker says I need to refi to a conventional loan and use my current home as an investment property @ 6.3% (30 year fixed). Is that my only option? Would it be wise for me to go to a higher rate?

smithsussane · Posted: Sun Sep 28, 2008 10:20 pm Post subject:

Hi rotamgeo!

Welcome to forums!

Yes, if you cannot get 2 FHA loans, it will be better for you to refinance it to a conventional loan. With this, you will be able to pay off your earlier loan and then you can continue paying the due amounts for the refinanced loan.

Feel free to ask if you have further queries.

Sussane

jerry · Posted: Mon Sep 29, 2008 2:47 am Post subject:

Hi rotamgeo!

Yes, I think refinancing will be a better option for you. This will help you get loan on easier terms.

Thanks,

Jerry

gmakerley · Posted: Mon Sep 29, 2008 11:39 am Post subject:

a rate of 6.3% isn't bad; all things considered. however, what's needed in order to give you the best of all opinions is to know what your current situation is concerning credit, etc.

it might not be a bad thing to obtain a conventional mortgage for the second home. look at all aspects of the deal, compare rates for each of these transactions and (assuming you have trust in your loan officer), get sage advice from there.

it is true you cannot have 2 fha loans at the same time.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

I have two concerns here. The first, 6.30 is too high for an FHA loan. Second, you may want to consider going conventional on the new home. The costs are much lower than FHA also. If you have 5% down and good credit, then I think this could be a better way to go financially since you would be able to keep your 5.50% and not incur closing costs on that property as well.

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Should I refinance from an FHA to a Conventional loan?