When should you refi a low FHA mortgage rate?

Beautiful luxury home exterior at twilightMany homeowners are hanging onto very low mortgage rates when they should perhaps consider refinancing the mortgage for a higher rate. What???

It’s true! If you have an FHA mortgage in the mid to high 3’s it may make sense refi to reduce your payment. If you factor in the mortgage insurance included in your monthly mortgage payment, your payment may be higher than what it could be with current interest rates.

For example, recently I reviewed a clients FHA mortgage that she obtained from us about seven years ago. Her current interest rate is 3.750% with current principal and interest of $1,344.15 and mortgage insurance of $131.90 for a total of $1,476.04.

I prepared a scenario for her based on paying off the current FHA mortgage for a conventional mortgage without private mortgage insurance. Based on current rates (as of 11:30 am March 14, 2019), loan amount of $258,000, 30 year conventional mortgage, credit scores between 660 to 850 with a loan to value 60% or lower, the home owner can refinance with a rate of 4.250% priced with 0.713 points (APR 4.515%).  The principal and interest payment of $1,269.20 is $206.84 lower than the current payment. This scenario will take about two years to break even on the refi so if they intend to keep the mortgage for longer than two years, then refinancing probably makes sense!

Although a rate in the 4’s may not sound as sexy having a rate in the 3’s. Dumping mortgage insurance and reducing your total monthly mortgage payment may be a smart move IF you’ll be keeping the home long enough to where the cost of the refi pencils out.

NOTE: Mortgage rates quoted are subject to change and credit approval.

I’m happy to review your scenario for you to see refinancing makes sense for your personal scenario. Click here for a no-hassle mortgage rate quote for your home located anywhere in Washington state.

A First Time Home Buyer’s Story

I’m so excited for some clients I helped buy their first home a couple of years ago. I thought I’d share their story – at least the Readers Digest version! 🙂

This couple attended a home buyers class that I was teaching back in 2014. They purchased their first home in Seattle in 2014 using a down payment assistance program we offer through the Washington State Housing Finance Commission. [Read more…]

Mortgage Rates Continue Lower

Freddie Mac’s PMMS report released this morning reveals mortgage rates continued to move lower for the third consecutive week. According to this report, mortgage interest rates are at their lowest in (just barely) over a year.

[Read more…]

Mortgage Rates Drop to Lowest in 10 Months!

Freddie Mac reports that mortgage interest rates are at 10 month lows in today’s Prime Market Mortgage Survey.

The Prime Mortgage Market Survey is based on an average of conforming mortgage rates from last week. If you would like to have a current mortgage rate quote based on your personal criteria for your home located anywhere in Washington state, please contact me! I’m happy to provide you with a no-hassle mortgage rate quote.

Qualifying for a mortgage when you pay alimony

Recently Fannie Mae and Freddie Mac updated their guidelines to treat alimony payments the same way that FHA has.

With conforming mortgages (Fannie/Freddie) where there is more than 10 months remaining for alimony payments, Fannie Mae and Freddie Mac will allow the alimony to be deducted from gross income instead of being treated as a monthly debt. This often dramatically improves debt-to-income ratios. [Read more…]

Update on the penny floor project

I’ve been meaning to share this post… it’s a little painful. Hopefully it will help others who are considering doing a penny floor. As you can see from these photos, we’ve had some issues with moisture. Hubby thinks it’s probably because we took too long to finish the job. I’m no pro, however (that doesn’t stop me from having my opinion that) I think it’s mostly because we did this on a basement floor. And living in Seattle, our basements can get damp. In reality, we’re probably both right… you can see the pennies starting to discolor in my last post. [Read more…]

Mortgage rates ahead of the Jobs Report

Freddie Mac’s PMMS (Prime Mortgage Market Survey) shows the 30 year fixed rate averaged just under 4% last week at 3.93% priced with 0.500 points.


Tomorrow morning, the Jobs Report will be released which may impact rates for better or worse. Stay tuned!

If I can help you with your refinance or home purchase anywhere in Washington state, please contact me.

Financing a “multi-generational” home


It’s becoming more common for families to have multiple generations living under the same roof. Some families opt to commit to buying a “multi-generational” home together designed to accommodate their lifestyle, whether it’s a home with an attached or detached dwelling unit (aka mother-in-law apartment) or even a home built specifically for generations to live together, there are options available for living with your parents and/or grown children. [Read more…]