Refinance DSCR Conventional?

[Paola Astrid]

Should I refi to dscr or conventional to remove pmi? 2 unit house 30 year FHA 6.6% major renovations (roof,bathrooms,kitchen,etc) home has appreciated 397k when appraised to 550k zestimate (similar comps in the area are 500k). Is it worth to refi at current rates? Thanks!

[Erik Estrada]

Are you currently living in the home? DSCR is for non-owner occupied residences only.

[Robin Simon]

Quote from @Paola Astrid:

Should I refi to dscr or conventional to remove pmi? 2 unit house 30 year FHA 6.6% major renovations (roof,bathrooms,kitchen,etc) home has appreciated 397k when appraised to 550k zestimate (similar comps in the area are 500k). Is it worth to refi at current rates? Thanks!

 Going to depend much more on more details / your personal situation - all things equal you will probably get better rate/terms on conventional if you qualify for both

[Patrick Roberts]

Quote from @Paola Astrid:

Should I refi to dscr or conventional to remove pmi? 2 unit house 30 year FHA 6.6% major renovations (roof,bathrooms,kitchen,etc) home has appreciated 397k when appraised to 550k zestimate (similar comps in the area are 500k). Is it worth to refi at current rates? Thanks!

Get a quote for each. With good credit and a relatively low LTV, they may price comparably.

[Derek Brickley]

For you to refi to an investment loan, it probably isn't worth it. Rates/terms are going to be much worse. Don't get me wrong I'm happy to help get you some estimates if that's useful hahah but still not something I'd recommend. If you're looking to househack again, then the conventional 5% down is a very viable alternative to the 3.5% down FHA option.

[Paola Astrid]

Quote from @Erik Estrada:

Are you currently living in the home? DSCR is for non-owner occupied residences only.

Agreed, looking to move out. Lived here 2 years.

[Paola Astrid]

Quote from @Robin Simon:

Quote from @Paola Astrid:

Should I refi to dscr or conventional to remove pmi? 2 unit house 30 year FHA 6.6% major renovations (roof,bathrooms,kitchen,etc) home has appreciated 397k when appraised to 550k zestimate (similar comps in the area are 500k). Is it worth to refi at current rates? Thanks!

 Going to depend much more on more details / your personal situation - all things equal you will probably get better rate/terms on conventional if you qualify for both

Thanks I have a good credit score just trying to get rid of that PMI

[Paola Astrid]

Quote from @Derek Brickley:

For you to refi to an investment loan, it probably isn't worth it. Rates/terms are going to be much worse. Don't get me wrong I'm happy to help get you some estimates if that's useful hahah but still not something I'd recommend. If you're looking to househack again, then the conventional 5% down is a very viable alternative to the 3.5% down FHA option.

 Appreciate it! I'll DM

[Erik Estrada]

Quote from @Paola Astrid:

Quote from @Erik Estrada:

Are you currently living in the home? DSCR is for non-owner occupied residences only.

Agreed, looking to move out. Lived here 2 years.

DSCR lenders are going to want to verify you are not living in the property when you start the refinance. I would recommend lining up another home first if you decide to go that route. They will pull a personal background report, will check IDs and question your current living situation. Make sure to have your bills at different address and having that unit you lived In, leased out.

[Jake Handler]

With the newer 5% down conventional loan for owner-occupied multifamily option, I generally advise people to start analyzing from there if they want to house hack a multifamily with minimal down. You don't need to refi to remove PMI if it's a conventional loan. Once you have enough equity you can go through the process of removal without refinancing. I've done it for two different properties and happy I didn't go FHA for that reason- although everyone's circumstances are different.

[Wale Lawal]

@Paola Astrid

If you're considering refinancing an FHA loan, it's a great way to lower monthly payments or gain more flexibility. From experience, switching to a conventional loan can help you remove PMI once you reach 20% equity, while DSCR loans are ideal if you're focused on rental income. Keep in mind refinancing costs typically range from 2%-5% of the loan amount, so weigh the upfront costs against the long-term savings to see what works best for your goals.

Good luck!

[Daniel Kopp]

HI there Paola,

I'd love to assist you on this. Send me a message so I can give you a tailored quote. Looking forward to connecting with you soon!

[Ko Kashiwagi]

Hi Paola,

If you are looking to buy another primary, looking to put the property into a LLC, may be changes in your income/job, looking for faster/smoother closing, DSCR could make more sense. Otherwise, it'd be best to compare both quotes/scenarios.

[Brittany Minocchi]

If you're living in it now, you'll probably be required to have a signed lease in place as well as proof that first month's rent/security deposit were collected in order to get a DSCR loan (they're business purpose loans and don't allow owner occupancy). You'll see a hike in rate going from FHA to conventional in general (especially if your plan is to pull some of that equity), but you're also going from owner occupied to investment (if you plan on moving) which is another layer of pricing adjustments.

[Deborah Wodell]

Paola, it sounds like you've done a great job building equity in the property, and the renovations have definitely paid off! If you're planning to move out, a conventional refi might be a solid way to get rid of PMI and lock in better terms—especially with your credit score.

[Jonathan Soto]

I can help with that. lets connect. DSCR is an investment loan