Guidance on What's next!!!

[Angel Ruiz]

Hi to all and thanks in advance. Right now I have a FHA on my principal home and a conventional on an investment property of 3 units. I just want some guidance on refinance options on the FHA, it's near or right on the 80% LTV and the investment property was a pretty good deal and im like 57% LTV.

Interest rates: 

FHA- 4.0

CONV- 5.5%

Right now the market in Puerto Rico is not like pre COVID with more choices available in multi unit investments as I like, but in the meantime what suggestions can I take a look to save some cash and be in a better position for when the market have more units available. Thanks to all and for all the valuable information in the forum!!!

[Jennifer Wilson]

Hi @Angel Ruiz,

It may be worth your while to talk to a lender about refinancing your FHA into a conventional loan in order to save money on the private mortgage insurance (PMI). With an FHA loan, you have to pay the PMI for the life of the loan, which is essentially just throwing money away. If you are at 80% LTV on the property, then you won't have mortgage insurance premiums (MIP, which is essentially the same thing as PMI) on a conventional loan. Depending on the value of the property, this could save you hundreds of dollars a month!

Now, because the interest rates are significantly different between the two loan programs, that's where it would be beneficial to talk to a lender to see exactly how much you'd save each month, and if it's worth while to refinance.