My FHA triplex hits month 12 in March, and the exit math won't settle
Bought a triplex two years ago at 412k, 3.5 percent down, owner-occupying the small back unit. PITI including the mortgage insurance is 3,205. The two units I rent are at 1,340 and 1,275, so I'm out of pocket about 590 a month plus whatever breaks. That has been fine. It was the only way I was getting into a building at all.
My unit would list somewhere around 1,400 based on what the other two did on renewal. So if I move out, gross rent is roughly 4,015 against a 3,205 payment, before vacancy and the roof I've been ignoring since the second winter.
The part I can't resolve is the mortgage insurance. With 3.5 percent down my understanding is it stays for the life of the loan and the only way out is refinancing into a conventional loan, which means giving up my rate and paying closing costs to save about 210 a month. My loan officer ran it and the breakeven was somewhere past year six, assuming the rate quote holds, which it won't by the time I actually do it.
Alternative is I stay put another year, let the rent bumps do the work, and put the saved cash toward a 5 percent conventional on a duplex instead. That keeps the cheap money and delays everything.
What I keep going back and forth on is whether the MIP is actually worth solving or whether I'm just annoyed by it. 210 a month is real. It is also less than one bad turnover. Anyone who has held past the occupancy period on a low down payment FHA, what did you actually do with it.