Furnishedowner’s post got me thinking whether or not refinancing would be a good idea or even possible. I did refinance my owner occupied 4 unit in March and went from 6.5% to 5.375%. I don’t think I have much more than 5-10% equity. I would be looking to lower my payment if it is feasible. Any advice would be appreciated.
JP
Well the general rule of thumb as to if a refi is worth while is somewhere around a 1% rate drop. The rates are low enogh to drop your existing rate by 1%, but the issue your going to run into is the lack of equity.
Based on your equity estimation, you wont be able to go Fannie / Freddie, so that leaves FHA, and yes you can go to 97.75% of the value, but exactly where will the loan to value end up once you add closing costs? The other issue is the up front MI on an FHA mortgage. If you were able to get to a position to use a Fannie Freddie loan, that would seem to be the best scenario. You could then crunch the numbers between the borrower paid MI and lender paid MI.
Any way you cut it, there are some hurdles to overcome, but if your willing to look at them, and in the end, if your willing to pay for the new appraisal to find out, then you got something. Short of that, it seems on the edge?