Right before the economy tanked in 2008 I purchased a house. My mortgage loan is a 2 year ARM. It is a conventional loan but even though I did not have a down payment, I do not pay a PMI. My loan is through my credit union. My current rate is 4.75. My LTV is at 97%. I have 26 years left on the loan. I would like to refinance. My question is:
1. Should I go with a 20 year FHA at 3.99% (and pay PMI) from an unknown lender or refinance with the credit union at 6%, also 20 year
2. How do I choose between FHA vs Conventional?
3. How do I choose between my credit union (who I know and love) and a lender who I do not know.
1) ANY FHA loan where you have a loan term of more than 15 years you will pay a MINIMUM of 5 years PMI. So if you get a big windfall you can't just knock out the mortgage and get rid of PMI. I wish I had known this before I went with FHA
2) Depends on your situation and cash flow. Unless you have 20% down I think conventional would be harder to get approved.
3) Go with your credit union usually... if you go elsewhere the is a possibility your loan will be sold and resold and you'll end up with the idiots at Bank of America.