If you want to stay with an FHA loan, you can refinance as an FHA Streamline. If you keep it as an FHA you cant roll your closing costs into the loan amount, you would have to pay out of pocket for them but you wouldn't need as much documentation as your first loan, or need an appraisal. If you try as a conventional Refinance, you can roll your closing costs into your loan amount so you don't have to come out of pocket for the closing costs and would need an appraisal. Let me know if you need more information.
@Devonte Blackmon Why you want to refinance? There should be purpose to refinance the loan. You can refinance as FHA or conventional. You can add closing cost to the loan depend on your Loan scenario.
Did you get any grants when you bought the home? If so, you're going to suffer a huge penalty. I know people who've gotten $5,000 in grants and they can't sell for 5 years unless they pay the grants back.
There's no reason to refinance (from my understanding) unless you plan on refinancing into a conventional loan. If that's the case, get it appraised and see what the bank can do for you. (I'm no professional at this. I'm going off what my banker told me)
For example, 6 months ago I bought my first house for $68,500. It appraised for $73,000. I was given a $1,000 grant. I didn't qualify for any larger grants do to my income (even though I don't make that much). I asked the bank if I could refinance after 24 months into a conventional loan. I plan on fixing the house up over the next two years. Once its finished I'll have it appraised. If its worth $80,000-$90,000 I can refinance into a conventional loan. BUT I'll have to have cash to put down in order to do so. IF I go that route I'll end up renting the house out and buying another house with the FHA loan.
I imagine you're scenario is pretty similar??? But, maybe I'm wrong. Why are you wanting to refinance anyway?
@Devonte Blackmon I think there are more variables at play, but you should be able to refinance now. Depending on any grants you received and the value of your home vs. current loan amount, it may or may not make sense to refinance right now.
can refinance anytime. I always tell my clients that cost will be about $2,500 to $3,000 when you factor in title insurance and lender fees. That does not include the prepaids you need for tax escrows.
Thanks for your responses. To answer some of you guys questions i am not actively looking to refinance. I wanted more clarity on it because this is my first house im 24 y/o with no knowledge and always hear old timers talking about how they refinanced their homes. I didn’t receive any grants. Also similar to what John Burtle said i was curious if I refinanced would i be able to get out of the fha loan and into a conventional. So later i can turn my primary into a rental property and buy another property with a fha loan. You guys gave me a clearer understanding on how itll work and if its possible thanks!
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing