1st Time Homeowner in MA - 01606

[Amanda Copeland]

I purchased my house utilizing an FHA loan, making a down payment of 3.5% and covering closing costs. I am approaching the one-year mark with my mortgage and have undertaken substantial renovations on the second-floor apartment, which I intend to rent out while residing on the first floor. Offsetting the mortgage expenses has become a priority for me.

However, I am also interested in exploring the possibility of eliminating Private Mortgage Insurance (PMI). To achieve this, I would like to understand the steps needed. Do I need a new assessment of my property's current value, and is it necessary to enlist the services of an appraiser? Or should I refinance from my existing FHA loan into a conventional one to remove the PMI requirement?

My FHA mortgage carries an interest rate of 7.25%, and I've observed that current rates appear to be higher than that figure. My primary objective is to eliminate the additional monthly cost of $380 associated with PMI without incurring additional financial burdens.

Open to any and all advice. 

[Ash Hegde]

Unfortunately if you put 3.5% down with FHA, the MIP will stay for the life of the loan and you would need to refinance to remove it. Rates are likely higher now, but it is worth a conversation with your lender. If your home went up in value and you are able to get a conventional refinance with no PMI your payment might end up being lower.