We just had a former client leave our office who was ecstatic about the refinancing option we approved her for. Her very words were, “More people should know about this. This is amazing!”
Let us explain…
We helped her family purchase a home in 2011 with an FHA loan since they, like many homebuyers, could only afford a small down payment. The mortgage insurance on an FHA loan is typically more expensive than the mortgage insurance on conventional loans with low down payments.
So why was she overjoyed this morning? This is where the magic happens…
She now has equity in her home (she has 20% equity, but even with less equity this still makes sense), and we were able not only to reduce her interest rate, but completely eliminate the mortgage insurance portion of her current payment. So her savings were realized in two fashions:
1) Lower interest rate, and
2) Removal of mortgage insurance. Both keep a lot more money in her checking account each month!
We told you that story so we could tell you this: If you have an FHA loan and bought when the market values were lower (2008-2012), we feel it will be in your best interest (literally) to give us a call to review what money savings may be available. As you know, we are not the “salesy” type. So as always, no obligations, just honest straight-forward answers and explanations. Our interest rates and costs do the selling for us.