Question by christerosterling: Mortgage Refinance – Mortgage Insurance Premium?
I am working on a mortgage refinance. I am going from a 7.5% to a 5.25% rate. The issue is that because of the value of my home and what I owe on it, I have to pay ,000 Mortgage Premium Insurance. Is this legit and/or am I paying too much? This doesn’t seem like a good deal.
Best answer:
Answer by linkus86
The easiest way to be sure if anything is legit is to shop your refinance with a different mortgage broker and see what fees and rates they will charge you. I suggest talking to 2 more mortgage brokers and crunch the numbers.
Know better? Leave your own answer in the comments!
You have not given enough information but I can probably reverse engineer it for you.
Your loan amount looks to be around $267,000 and it is an FHA loan you were quoted; if so, the $6,000 as the UFMIP (Up front mortgage insurance premium) is correct.
You are asking 2 different questions. Is it legit? Yes, if the numbers match what I just said.
Is it a good deal, I would say probably not because 5.25% is too high based on current rates for that loan amount and an FHA loan may or may not be your best option.
Get another quote.
On every FHA loan there is a 2.25% mortgage insurance premium, so yes, it is legit. As for the rest of your loan, it’s irresponsible for anyone to say if it’s a good deal or not without knowing the whole story. If you’re paying additional fees on top of the 5.25%, then no, it’s not a good deal. If the 5.25% is a no fee deal, than it could be a good deal. No one knows without seeing your Good Faith Estimate.
If you’re really concerned about the offer, than it would be a good idea to shop a couple more lenders and compare. Rates are down a little bit right now, so if it’s been a few days since you got that quote from your current lender, approach them about lowering the rate.