First Mortgage: 295,752.98$ 7.25% FHA
Second mortgage (DPA) 9,598.12$ 9.25%
Total loan balance of 305,351.10$
Both loans were opened March of 2023
Appraisal Came in at 335,000$
Property’s zip code 85396
My middle credit number was 714
Home Owners insurance 912.89$ a year, 76.07$ a month
Property tax 916.80$ a year, 76.40$ a month
HOA 740$ a year, paid 185$ quarterly
I’m looking to try to do this no money out of pocket. Just to try and lower my payment
Conventional and FHA will allow you to refinance a first and 2nd lien as a rate and term, provided that the 2nd lien was used to purchase the property. Good chance you can do this with no funds coming to closing. Best bet would be taking a loan application with a credit union, reputable bank, and at least one mortgage broker to get the best pricing/outcome for you. If you mention you are shopping around they tend to be more likely to give you a better rate/pricing to get the deal
@Kingsley
Thank you 
I’m looking to try to do this no money out of pocket. Just to try and lower my payment
I may not get you a 6 month return on investment now but I can within a couple of months.
Jo said:
When did you purchase your home? More specifically when did you make your first payment?
March of 2023, first payment was April 2023
Is the DPA second forgivable or a straight up loan to pay back? With that value you should be able to refinance into another FHA loan doing a rate term since 2nd was used to purchase the house. You should be able to get around 6.25% today without paying points. You would have to pay the FHA funding fee which is financed into your loan.
@Winslow
The DPA I need to find more info on, but the FHA funding fee is 1.75% of the loan from what I’m understanding. I’m able to go either conventional or FHA I’m trying to see what makes more sense
@Frost
You probably won’t lower your rate on a conventional even if you pay a discount point equal to the FHA funding fee. Your MI would likely be higher. Have a loan officer run both quotes for you. At first glance if you want to refinance now FHA looks like the better option but run the numbers with someone to confirm. Good luck.
Your answer will depend on the terms of your second mortgage. You can refinance your first loan amount without a problem. Your hang-up will start with the down payment assistance you used. Do you know what down payment program you used?
you can lower your rate but highly unlikely you’ll pay nothing out of pocket. most lenders will require you to pay off the second mortgage— very few will allow subordination. so it becomes a cash out refinance which the rates are higher. you might just sit tight until you have more equity at 20% and wiggle room to refinance into a conventional loan.
@Jess
This is incorrect. It can be refinanced by some programs as it was used to acquire the property.