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.

2019 FHA Loan Limits for Washington State

HUD had just announced the FHA loan limits for 2019. Homes in the greater Seattle area, including King, Pierce and Snohomish counties, will have a higher loan limit, often referred to as an FHA jumbo. Not all counties received higher loan limits for 2019. Clark, Island, King, Kitsap, Pierce, Skagit, Skamania, Snohomish, Thurston and Whatcom counties have increased loan limits for 2019.

Here is a complete list of FHA loan limits for all counties in Washington. [Read more…]

BREAKING NEWS: 2019 FHA Loan Limits for Greater Seattle

HUD had just announced the FHA loan limits for 2019. Homes in the greater Seattle area, including King, Pierce and Snohomish counties, will have a higher loan limit, often referred to as an FHA jumbo. The FHA loan limits match those of conforming high balance loan amounts in these counties.

The 2019 FHA Loan Limits for homes located in King County, Snohomish County and Pierce County are:

  • One Unit: $726,525
  • Two Unit: $930,300
  • Three Unit: $1,234,475
  • Four Unit: $1,397,400

Stay tuned for a follow up post which will include all counties in Washington state.

 

Common Misconceptions about FHA and Conventional Mortgages

I just received a newsletter from a local real estate agent which had an article about whether buyers should opt for a conventional or FHA loan. I’m pretty certain the real estate agent didn’t write the article, however the author, whoever they are, got a lot of things wrong regarding these two mortgage programs. Many of the items that were wrong are what I think are fairly common misconceptions with these two popular mortgage programs. So I thought this was a grand opportunity to write a post to correct them…I’ll skip the fine hairs 😉 [Read more…]

Rehab Mortgage Loans for Remodeling Your New or Existing Home

Want to build an ADU on your garage? Are you having a hard time finding a home that has your dream kitchen? Whether you are buying or refinancing a home, you may want to consider a “rehab” mortgage. At Mortgage Master Service Corporation, we currently have a couple options available. [Read more…]

Stop paying rent: Mortgages with Low Down Payment Options

Recently I wrote about neighbors in West Seattle who were looking for a new place to rent because they have two cats and a dog, limiting their options.  I’ve pets my entire life, this is my cat Rocko at his typical hang-out where he can view everything on our stairs.

In my last post, I shared Fannie Mae’s Home Ready mortgage program which offers a low down payment with improved pricing on rates and mortgage insurance. [Read more…]

2018 FHA Loan Limits for Washington State

iStock-000018668640XSmallHUD has just announced FHA loan limits for 2018. Due to the increased value of homes, the FHA base loan amount was increased to $294,515 for single family dwellings. FHA loan limits also match the conforming high balance limits in applicable counties. Not all counties saw an increase in FHA loan limits.

Loan limits for 2018 are in effect with FHA case numbers issued in 2018.

Here is a complete list of FHA loan limits for all counties in Washington. [Read more…]

HUD’s reducing Mortgage Insurance on FHA Mortgages

iStock-000018668640XSmallUPDATE January 20, 2016: HUD has suspended the reduction to FHA mortgage insurance effective immediately.

HUD has announced today that mortgage insurance will be reduced on most FHA mortgages. FHA mortgages have two types of “mortgage insurance” the borrowers pay regardless of loan to value. There is the upfront mortgage insurance (currently 1.75% of the loan amount) that is typically added to the base loan amount and financed over the life of the loan and there is the annual mortgage insurance that is actually paid as part of the monthly mortgage payment. This reduction of 25 basis points is on the annual mortgage insurance premium.

[Read more…]