Friday, October 16, 2015

I have a headache

Well, the mortgage refi process is in motion.I heard back from a loan officer at the bank that holds our heloc loan. A flurry of emails back and forth all morning through early afternoon. Me supplying him with lots of info and then find out that a conventional loan will only lend 65% LTV%. Well, then our home would have to appraise at like $268,000 to get a conventional loan. That probably isn't likely to happen (unless the realtor was that low in her estimate. She said $250,000). So then he's telling me we'd have to bring cash to the, that's not going to work.

So then he says we can try to go the FHA route. We have to supply more documentation than conventional, as well as hire an engineer to prove our foundation passes the guidelines for manufactured homes for FHA. Apparently that will be about $350.  The worksheet of costs he sent me showed a Mortgage insurance premium of $3106 included in the costs as well as $65 a month added to our mortgage payment. I questioned on this - is that $65 a month for the whole 15 year loan? He sent me some many FHA document explaining it. What I took out of trying to read all of it was if the loan was 15 years or less and the LTV% was 78% or less, then the mortgage insurance wasn't needed. Our loan of $174,000 (with closing costs) would be at 78% or less if our home would appraise at $223,000, which it should. He said that's how he read it, too.

I got out of this a 685 and a 674 credit scores (they use the 674), which shows me CreditKarma and CreditSesame are a bit overstated at 700.

I'm working on getting all the documents he needs. Pay stubs, W-2's, tax returns, bank statements, bankruptcy discharge letter, etc.  Who knows if we'll even get approved as FHA, but if we do I think that will make things better for when we try to sell - then we will know it's FHA approved and will open us up to more buyers, some who can only go FHA.

So far it's all a pain in the you know what, but if it will save us $800 a month in payments, much worth it. $800 a month to get us that much closer to getting more equity into our home and getting ready to sell.


  1. When you have paid a certain percentage of you loan, you can drop the mortgage insurance. But, they won't volunteer when.

    The escrow payment goes up sometimes monthly, sometimes every few months.

  2. I think FHA loans have mortgage insurance for the life of the loan, unlike conventional mortgages.

    1. From what I read in the FHA info he sent me, if you have a 30 year mortgage, then you have mtg insur for the life of the loan. If you have a 15 year, it's 11 years, unless your LTV% is 78 or less. But I could be totally wrong - it was pages and pages of gov't rules, so who knows.

    2. I just re-read through it all again - an you are correct - that was the "previous" rule. Now, for a 15 yr loan it's either 11 years or life of loan. Hmm..not sure I'm willing to add all that cost to my loan.....

  3. Hope you have managed to get all your finances sorted out now. Good luck with everything I know its hard trying to juggle family life and paying bills ect. Hope everything works out. I think this is an inspiring blog which can help others live more frugally. Or maybe you have managed to sell your house by now.

    Naomi Cruz @ 4 Pillars