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Trying to refinance into FHA


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Im currently trying to refiance into FHA. My wife and I closed on a house on Sept 28th of this year. We were kind of stuck at the time and didnt do FHA to begin with but a loan officer told me we could refiance into FHA after. We have a conventional 30yr fixed loan at 8.25% with a huge PMI payment since we went 100% financing.

We are really trying to get out of the PMI. We bought the house for 195,900. The house appraised for 215,000 at the time of purchase.

I have just started the FHA process and now my loan officer says even though the credit scores are in line FHA will no longer give me a loan for 97% of appraised value. They will only do a loan amount for 97% of the purchased value which makes it impossible for us to do.

Is there anyone out there with advice or someone that can help us out here?



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Try Charles in this mortgage forum. Members have posted positive experiences (though I have no experience personally).

FYI about FHA. You will have PMI. It is just paid differently. You pay 1.5% upfront (required), then pay PMI monthly. But the monthly portion is reduced because of the upfront lump sum that you pay. To give you an idea, my upfront lump sum was $3500 and my monthly portion is roughly $80 that is paid to HUD Insurance.

So you'd put 3% down, pay 1.5% upfront PMI, plus whatever other closing costs you pay. But you may have a rate in the high 5's/low 6s instead of low 8s.

It is almost impossible to escape PMI in the current lending situation with little down payment.

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