How a Young Couple Saved $412/Month by Refinancing into a Conventional Loan
- By Jim Blackburn
- on
Client Profile
- Names: Jasmine & Tyler B.
- Ages: 34 & 36
- Location: Denver, CO
- Home Type: 3-bed single-family
- Original Loan: FHA (4.25% rate, with PMI)
- Loan Type After Refi: Conventional 30-Year Fixed
- New Rate: 3.25% (No PMI)
- Equity at Time of Refi: 23%
The Challenge
Jasmine and Tyler bought their home three years ago using an FHA loan with 3.5% down. While it was a great option at the time, their mortgage insurance premium (PMI) added nearly $190/month.
After the market boomed in their neighborhood and their home gained value, they wanted to see if a refinance could help them lower their monthly payment and eliminate the PMI.
The Strategy
We reviewed their home’s value, which had risen from $405K to $510K, giving them over 20% equity. That made them eligible to refinance into a conventional loan and ditch the FHA loan’s mortgage insurance.
Here’s what we structured:
- 30-year fixed conventional refinance at 3.25%
- No PMI
- $2,100 in lender credits covered most closing costs
- Monthly payment dropped from $2,165 to $1,753
The Outcome
- They now save $412/month—over $4,900/year
- Their loan balance is dropping faster without monthly PMI
- They applied the savings toward their first vacation in 3 years
- They’re on track to pay off the home 7 years early by making just one extra payment per year
Quote from Jasmine:
“We were just hoping to cut our interest rate. We didn’t realize we could eliminate PMI too—and save over $400 a month. It was a game changer.”
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