Mortgage question

Discussion in 'Credit Talk' started by jeffalan49, Jan 17, 2017.

  1. jeffalan49

    jeffalan49 Member

    Hi. Long story. New FHA loan on a new home in January 2015. Mortgage includes escrow. In October 2016, got letter from mortgage company saying my escrow is 2800 short. Pay it now or the mortgage payment will go up by $340 for a total payment of 2208 for Nov 2016 through Nov 2017. Could not afford the 2800 shortage so I chose to pay 2208 per month. After Nov 2017, payment will go down to 1965.
    Got approved for conventional loan at 4.75%. My FHA is at 4.125% with MPI of $179 per month.
    Going conventional will rid me of the required MPI and will fix my escrow and save me 300 per month. But the loan will put me at 80% LTV and my main idea was to take about 20K out of my home equity for the house deck and other things.
    Not sure what to do.
    1) Should I keep the FHA loan and just pay off the escrow in March to reduce my house payment?
    2) Should I just apply for an equity loan without re financing?
    3) The re-fi will tack about 4K and will erase all the principle I built in the past year and a half.
    4) I owe about 8K in revolving debt.
    5) Credit scores from all 3 are at 670.

    Please let me know what the better choice is: Re fi or apply for equity loan.

    Thanks so much.
  2. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Sorry for the delayed response Jeff. If your main goal is to really just take out $20K for some home projects, have you thought about a HELOC? Could be the cheapest, easiest, and most flexible way to go.

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