Borrower removes insurance, lowers monthly payment

Mortgage adviser: Brenda Wyatt.

Property type: Four-unit in Lake Merritt area of Oakland. Loan amount: $661,025. Loan type: 5/1 adjustable-rate mortgage.

Rate: 3.875 percent. Backstory: Six months after using Brenda Wyatt to purchase a four-unit residence in Oakland through FHA financing, the client returned in hopes the property’s value had appreciated enough to remove the monthly mortgage insurance.

The borrower cannot cancel Federal Housing Administration mortgage insurance. The only way to remove it is by refinancing into a non-FHA-insured loan.

FHA financing requires only 3.5 percent down on multiunit property, as opposed to the conventional requirement of 25 percent, making it an attractive option for a buyer who does not have the money to put down.

FHA requires borrowers pass a “self-sufficiency test” to get approval for multiunit properties.

In this case, the value of the property had increased substantially and Wyatt was able to refinance the FHA mortgage into a conventional 30-year fixed in just 19 business days. The refinance not only reduced the interest rate, but it will save the client thousands of dollars in mortgage insurance payments. Article submitted by Brenda Wyatt, All California Mortgage, 510-761-7071,

bwyatt@allcalifornia.com.