how do I refinance a FHA loan to 15 year conventional?

[Anonymous]

I had to get a FHA loan two years ago. I have a low score due to some medical debt. My score is still in recovery (600s).

I would like to buckle down and get a 15 year loan and lock in lower rates if at all possible.

We did remodel our kitchen recently and have $311,000 left on our mortgage.

[Anonymous]

The bank can answer your credit score question. We refinanced easily along these lines but our scores are about 700 / 720.

As for the loan, as you know you will want to have 20 percent equity to get a standard conventional loan. I assume you didn't have this equity when you purchased the house two years ago, as that is the usual reason to go for an FHA loan. Time and the kitchen renovation may have helped to build some equity for you. You might very nicely ask your realtor to pull comps for you (nicely, because they won't get anything for doing so). See if there's any chance you have this equity now. With only two years payments, your payments have not created much equity. So unless you have cash to put up, market factors and improvements alone will have to do that work.

If you did put down a 20 percent when you purchased, so that you are not bleeding out money to mortgage insurance, you might do better just putting the cost of refinancing (several thousand bucks) straight against your loan principal. Then make larger payments than required each month to turn your 30 year into a 15.

If you are carrying any debt other than your mortgage, personally I would pay that all down to zero before commiting to larger mortgage payments. It will give you peace of mind and improve your credit profile.

[Anonymous]

OP - what is your current rate?