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Why would you ever refinance your conventional loan with no monthly mortgage insurance into an FHA loan with life of loan MI? Depending on your financial needs and circumstances looking at all of the options is always the best plan.
When I was informed by the loan servicing company that my repeat client may have been shopping for a new loan, I immediately got on the phone to discuss his situation.
We had closed on a conventional refinance a few years ago, paid off a great deal of debt and put the family in a great financial situation. He was embarrassed for his new situation and speaking to another lender about possible solutions. As with everyone, life happens and he had to take on additional debt for his children and now we needed some solutions to save money monthly.
With the additional debt, our credit card balances were much higher, making the credit scores drop making a conventional refinance almost impossible.
I put on the Coaching hat and reminded him, I am like your lawyer, you tell me the problem and I will work on a solution.
After looking at all of our options, I called an audible and decided on using a government loan. Although a new FHA loan had mortgage insurance, we were still able to get a much lower interest rate than current conventional rates due to the lower credit scores.
The current loan they had was at 6.20%, we were able to set things up to refinance with a 6.249% interest rate.
Looking at the big picture regarding your finances can make all the difference. For this client, the stigma of an FHA loan and the mortgage insurance was not at important as the total monthly savings!
A winning game plan! Remember, if you or anyone needs the best gameplan for your financial playbook, give the Coach a call.
