Since its origination in 1934, many American’s have opted into the FHA program after finding that they could save thousands. How? By shrinking the required down payment on their mortgage to as low as 3.5%. If you have an FHA loan, reading on just might save you thousands.
If you don’t have an FHA, you can still see if refinancing will save you money here.
How to Save with a Conventional Refinance:
1. Refinance to Eliminate Your MIP
You can save by eliminating your MIP (Mortgage Insurance Premium). FHA loans after June 3, 2018 require MIP for up to 11 years or longer. On average this monthly MIP can cost hundreds of dollars a month. If you were to cut out that PMI cost, say at $125 a month for 30 years, you’d save $45,000.
The surefire way to achieve these savings is to refinance into a conventional mortgage once you’ve reached a loan-to-value ratio of 80 percent. Start that road to savings here.
2. 30-To-15 Offers In Minutes
Switching from a 30-year FHA to a conventional 15-year mortgage can save you tons in the long run! A 15-year mortgage crushes a 30-year FHA mortgage on two overlapping fronts: interest over time, and interest rates.
The bottom line: MorningFinance found that 72% of an employee’s monthly payment on a 30-year mortgage was pure interest.
When a member of the Morning Finance team plugged his information into LendingTree’s secure platform, he was shocked by the result. By switching from a 30- to a 15-year fixed rate mortgage, he unlocked $159,447.09 in savings.
PRO TIP: For your 30-year mortgage, a reputable lender can help you switch to a 15-year. Find a new loan term here ›››
If you’re not ready to refinance into a conventional mortgage, you can still leverage the benefits of an FHA refinance.
How to Save with a FHA Refinance:
1. FHA Cash-Out Refinance
An FHA Refinance can be an effective way to get cash out of your home if the value of your home has increased. You’ll get a lump-sum amount from the bank, adding that amount to your refinanced mortgage. If you need cash, this could be an excellent way to get it at a practical rate.
2. FHA Streamline Refinance
Credit Score improved? You can get an FHA streamline refinance.This type of refinance allows you to do one of two things:
To simplify your search, follow the below to refinance:
Step 2: Once you go through a few questions, you will compare quotes from multiple lenders!