To remove mortgage insurance
With FHA changing their guidelines to require mortgage insurance on their 30 year fixed loans for the life of the loan, this has brought removing mortgage insurance to the forefront. Whether to refinance or not to refinance…that is the question.
The question of refinancing to get rid of mortgage insurance reverts back to the mantra of any refinance – does it make sense? To figure this out you need to get answers to the following questions:
- What is my current interest rate?
- What is the current rate (or cost) of my monthly mortgage insurance?
- Do I have an FHA loan? If so, when did I close on my FHA loan? Even further, when was my FHA case number ordered (ask the lender that did the loan)?
- Will my current MI automatically drop off? Will it never drop off? Can I request it to be removed?
Asking these questions is going to allow you to compare your current loan, interest rate, and mortgage insurance rate to new mortgage options. It is not uncommon for us to deter people from refinancing with us because they are either very close to having their mortgage insurance drop off or the new rate is not better than their current rate with interest plus mortgage insurance.