Refinance out of FHA to CONV with HELOC?
Hello,
Looking to get advice on what is the best option for my situation. Here it goes: I have an FHA Loan on my primary residence (currently in forbearance) with PMI of $208 per month @ 3.375% interest mortgage rate. I also have a HELOC @ 4.35% variable for $80k credit limit (current balance of $0) with US Bank which I opened to use for real estate investing. I have the option to refinance @ 2.875% to remove PMI AND lower my interest rate which equates to $300 per month savings on mortgage payment but I would need to close my HELOC to stay at or under 80% LTV to remove PMI.
Options:
A - End FHA forbearance with a repayment plan which still allows me to refinance but also need to close HELOC so LTV looks good to remove PMI. Reapply for another HELOC soon after, maybe at a better rate and fixed rate.
B - End FHA forbearance with repayment plan which still allows me to refinance but still keep and reduce my HELOC credit limit to meet the 80% LTV to remove PMI. Refinance company would need to send Subordination Letter to HELOC lender to agree that HELOC will remain in 2nd position lien which can drag out refinance for maybe another 30 days.
C - End FHA forbearance by paying past due balance of $12k in full with my HELOC and then refinance mortgage loan and HELOC bundled and then close the HELOC. Reapply for another HELOC soon after, maybe at a better rate and fixed rate.
Thanks! Any and all advice is much appreciated.
Best,
DB