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Subject:  Re: FHA Streamline Refinance Date:  5/7/2013  6:10 PM
Author:  JamesBrown Number:  307004 of 312161

With a $95k balance and a valuation of $119k, you are at 79.8% LTV (loan to value). At this point, you should probably be looking to refinance into a conventional loan, rather than an FHA loan, streamline or not.

With a conventional mortgage, lenders are required to remove PMI (Private Mortgage Insurance) when your loan gets to a principal that is 78% or less of the original valuation. With FHA MIP (Mortgage Insurance Premium), the MIP can be required to remain for a minimum of 5 years (and soon to be the full term of the mortgage), even if the LTV is signficantly lower than 78%.

Thanks for reminding me of that. At a current value of $119K, I won't fall below that magic 78% threshold until the loan balance is less than $92,800, and I won't have paid the loan down to that level for over a year at my current rate of payment. I can't imagine it would make sense for me to refinance now, and then refinance again next year to jettison the MIP. So I suppose I'd have to gamble on interest rates staying low for another year or so and then refinancing to a conventional loan sans MIP. My gut tells me that's a safe bet.
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