FHA Streamline?

I have an FHA loan on my house. The rate is high. I want to refi the house but plan to sell within a year. Does anybody here deal with this for a living that can help?

I would argue that in most cases, if you are planning to sell within a year the closing costs for the refi are going to eat up any savings and then some.

The general rule of thumb (and I was just at the bank last Friday to refinance) is it's going to take about 2 years to break even on a re-fi. That's not the case 100% of the time, but you'd have to be making a huge improvement in interest rate for it to pay off in one year.

53rd offers a re-fi with no costs. The rate is a bit higher than their best rate but it's 3.875% compared to 2.75% on a 15-year. I'm sure other banks offer similar deals.

You guys are thinking of conventional loans. An FHA streamline allows me to basically rework my existing loan into a new loan with a lower rate for not a lot of money. No appraisal, or things like that.

jimbob_racing wrote: You guys are thinking of conventional loans. An FHA streamline allows me to basically rework my existing loan into a new loan with a lower rate for not a lot of money. No appraisal, or things like that.

Maybe.

The mechanics of refinancing are similar for both. The FHA streamline eliminates much of the credit qualifying criteria but there are still costs to consider. A lender may or may not require an appraisal to make sure you are not too far underwater. You still need title insurance, transfer fees, etc.

The good news is that the UFMIP (Up Front Mortgage Insurance Premium) has been recently reduced to basically nothing.

Given your 1 year target, you could benefit if you find a true "no cost" refi. As indicated, the costs would be paid by the lender in exchange for a somewhat higher rate (but still likely much lower than you have now). The lender will lose in this deal when you pay off in 1 year - that's the gamble they take for the higher yield.