Conventional Refinance Loan With No Private Mortgage Insurance

Homeowners With FHA Loans Should Consider A Conventional Refinance Loan While Mortgage Rates Are At Historic Lows And Avoid Paying FHA MIP.

Homeowners With FHA Loans Should Consider A Conventional Refinance Loan While Mortgage Rates Are At Historic Lows And Avoid Paying FHA MIP. Home values have skyrocketed in the past several years to unbelievable levels. Both HUD and the FHFA have increased FHA and Conforming Loan Limits for the past five years. The FHA Loan Limit for 2021 is now at $356,362 on single-family homes in traditional areas. The 2021 Conforming Loan Limits is now capped at $548,250. FHA and Conventional loan limits in high-cost areas are substantially higher. Many homeowners do not realize they are sitting on a lot of equity. Many homeowners with FHA loans can greatly benefit by refinancing to a conventional loan. For those with 20% or more equity in their homes can eliminate paying for the hefty high-priced FHA mortgage insurance premium. If you do not have 20% equity in your home, you may want to consider refinancing into a lender-paid mortgage-insurance conventional loan which is often referred to as LPMI Conventional loans. LPMI conventional loans are when a borrower pays upfront private mortgage insurance and does not have to pay annual private mortgage insurance on conventional loans.  It is similar to the upfront FHA mortgage insurance premium. In this article, we will discuss and cover the benefit of conventional refinance loan programs.

Benefit Of Conventional Refinance Loan

When mortgage rates drop, every homeowner should think about refinancing their current home loan with a new mortgage loan. Refinancing at a lower mortgage rate can save homeowners money on interest expense during the term of the mortgage loan.  Refinancing can save a homeowner tens of thousands of dollars over the life of their mortgage loan.  Conventional loans have an extra benefit when it comes to mortgage insurance. Private Mortgage Insurance is mandatory on all conventional loans with less than 20% equity. However,  the private mortgage insurance on conventional loans is much less costly than the FHA mortgage insurance premium. Also, home values have skyrocketed. Many homeowners may be sitting on over 20% equity in their homes. Other options include exploring refinancing into an LPMI Conventional Loan to eliminate private mortgage insurance altogether.

Lender Paid Mortgage Insurance

There are various conventional refinance mortgage loan program that suits each particular refinance mortgage loan borrower. If you have less than 20% equity in your home, you can still refinance your current mortgage loan with no private mortgage insurance through a conventional loan program called lender paid mortgage insurance ( LPMI ) conventional refinance mortgage loan program.  The lender-paid mortgage insurance conventional loan program does not require conventional private mortgage insurance paid by the mortgage loan borrower.  The conventional private insurance premium is built into the conventional mortgage rate.  Lender paid mortgage insurance conventional loan program is available for homeowners who have less than 20% equity in their homes.  In lieu of a slightly higher mortgage rate, the homeowner avoids the extra cost of monthly private mortgage insurance costs.

Refinance FHA Loan To Conventional To Avoid FHA Mortgage Insurance

Whether you have 20% equity in your home or less than 20% equity in your home, if you currently have an FHA insured mortgage loan, you can think about refinancing your current FHA insured mortgage loan to a Conventional Loan and avoid the high FHA annual mortgage insurance premium.  On another note, many homeowners who have purchased their homes several years ago during the real estate and credit meltdown in 2008 got their homes at rock bottom prices.

Booming Housing Market

Which means a dynamically developing housing market

These lucky homeowners may not realize how much their homes have appreciated over the years and many do not realize that their homes have appreciated 20% or more.  Areas in California, Texas, Georgia, Illinois, Florida, Indiana, and many parts of the country have seen home values appreciate double digits year after year.  If you have 20% or more equity in your home and you have an FHA home loan, you may want to refinance your FHA loan into a Conventional loan and avoid mortgage insurance altogether.  For homeowners with less than 20% equity and with an FHA loan, an analysis of refinancing their FHA loan to a Conventional Loan with Lender Paid Mortgage Insurance may be extremely beneficial.

Cash-Out Conventional Loans

If you have equity in your home, you may be eligible for a cash-out refinance mortgage loan with  Gustan Cho Associates. Real estate values have skyrocketed in recent years and many homeowners do not realize that their home values are higher than they think. Contact us at Gustan Cho Associates at to explore a cash-out refinance mortgage loan so you can consolidate your debts or use the cash from your refinance mortgage loan for home improvement.  You can get a cash-out refinance conventional mortgage loan with up to 80% Loan to Value on Conventional Loans.

Fannie Mae And Freddie Mac Conventional Refinance Guidelines

Homeowners needing a Conventional Loan refinance mortgage need to meet Fannie Mae and/or Freddie Mac guidelines.  Minimum credit scores of 620 FICO credit are required for all Conventional Loan borrowers.  The maximum Conventional Loan limit is $548,250 unless the property is located in a high-cost area where the Conventional Loan limits are significantly higher.  To get the best Conventional mortgage rates, you need a high credit score.  The best Conventional mortgage rates are for Conventional mortgage loan borrowers with credit scores higher than 740 FICO.  As your credit scores drop every 20 points, there is a negative price adjustment to your Conventional mortgage rates.

Boosting Your Credit Scores To Get Lowest Possible Mortgage Rate

Which means increasing your credit score to get the lowest mortgage rate possible

Conventional Loan Borrowers with lower credit scores may want to maximize their credit scores to get the best available conventional loan mortgage rates.  Prior to refinancing, there are some quick fixes to boost and maximize your credit scores such as paying down your credit cards to 20% or less of your credit limit. Gustan Cho Associates is a mortgage lender licensed in multiple states with no lender overlays on government and conventional loans. We are experts in refinancing. The team at Gustan Cho Associates has saved tens of thousands of homeowners money by refinancing their home loans.

1 Comment
  1. Sarah Canfield says

    Can you do a 95% purchase loan for a self employed client?

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