FHA Streamline Refinance Question (PMI, loan, interest rate, escrow)

[blueeyz911]

I bought my first home 9 months ago- FHA loan, 6% 30 year fixed. My mortgage banker called about an FHA streamlime refi. Sounded good so I said ok, work the figures. They came back with 4.25%- $90 less a month, w/ $2400 closing costs. I said no, can't come up with the cc. So they re-worked it for me and came up with 5%- 71 less a month, $1,300 cc.

The problem is, money is very tight right now so I would really like to keep the closing costs as low as possible.

I am comfortable with my current mortgage payment but of course would not mind my interest rate lowered. I read online that you can get a ZERO closing costs option for an FHA streamline refi. I understand that it will not lower my payment much but anything is better than nothing. I am willing to pay cc of the amount of my mortgage payment that way I am not losing any money because I get to skip a month after th re-fi.

Should I even re-fi? Are there any downsides to this FHA streamline program that they are not telling me? Any professional advice would be appreciated. Thanks.

[Daddys///M3]

There are options for no cost FHA streamlines but they come with a higher rate. There are still 3rd party fees and escrow reserves that will need to be paid (anything currently in the escrow account will be refunded to you within 30 days of close) and these costs will be covered by a combination of your UFMIP refund and YSP, as well as the LO's compensation coming from the YSP. Coming in with an amount equal to your mortgage payment may be the ticket if you are saving at least $50 a month. The downside is your principal balance will go up. The caculation is old loan amount (including UFMIP) plus new UFMIP equals new loan amount, so on a $100,000 loan where the original UFMIP was $1750 and the total loan amount was $101750, the new loan amount would be $103530.62. Hope this helps and good luck.

[blueeyz911]

Thanks for responding.

[darrenshouse]

Is it possible that escrowed funds(tax, insurance) be transferred to the new loan(FHA streamline) so that these costs(finanaced by borower) are not added into the new principle.

[ShanetheMortgageMan]

If you are streamline refinancing with the same lender it is possible, otherwise within 30 days of paying off the existing mortgage the escrow account balance would be refunded.

[homeowner9999]

UPMIP in July 2010 is 2.25% of the loan amount

[Silverbullit]

I have the same as what blueeyz911 had going on.
Current FHA 5% rate with a refinance quoted at 4.5% with no closing costs. Only increase is the FHA funding cost which increases my 241,600 (not payoff amount) mortgage to approx. 246,100. This is with paying my normal mtg amount at closing. They are supposed to be covering my escrow funding at closing as well.
Have the rates gone any lower to get this at a rate lower than the 4.5%

Thanks
Curt