“FHA ANNOUNCES PRICE CUTS TO ENCOURAGE STREAMLINE REFINANCING
Millions of FHA borrowers save up to $3,000 yearly.
WASHINGTON – Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to FHA’s Streamline Refinance Program that could benefit millions of borrowers whose mortgages are currently insured by FHA. Beginning June 11, 2012, FHA lowered its Upfront Mortgage Insurance Premium (UFMIP) to just .01 percent and reduce its annual premium to .55 percent for certain FHA borrowers.
To qualify, borrowers must be current on their existing FHA-insured mortgages which were endorsed on or before May 31, 2009. ”
This is big news! Many Sonoma County homeowners have been unable to refinance their FHA Mortgages because the mortgage insurance premiums have risen several times since May of 2009. The present monthly mortgage insurance is 125% of the loan amount for all loans taken out after May 2009.
How Hud’s reduced monthly mortgage insurance helps homeowners complete FHA Streamline Refinances
Let’s take a look at that $300,000 loan amount one more time. Based on the new streamline insurance premiums, that monthly mortgage insurance is now$137.50 per month. The additional $175 per month savings is the benefit a current homeowner would receive for participating in HUD’s FHA Streamline Program.
The net tangible benefit for refinancing previously was eroded by the higher mortgage insurance premiums despite the lower interest rates. So in other words, the monthly savings a borrower would receive by reducing their interest rate was offset by higher monthly mortgage insurance premiums. HUD recognized reducing mortgage insurance premiums for homeowners looking to refinance, made sense, FHA Commissioner Carol Galante offered the following:
“This is one way that FHA can make a real difference to help homeowners who are doing the right thing, paying their bills on time and want to take advantage of today’s low interest rates,” said Galante. “By significantly reducing costs for these borrowers, we can make certain they cut their monthly mortgage burden which will benefit the housing market and the broader economy in the process.”
To determine your eligibility for a new FHA Streamline Refinance, following has to be met:
* Current first mortgage loan must be insured by the Federal Housing Administration (non FHA loans are ineligible)
* Loan cannot have been taken out after May 31, 2009
* Previous loan a purchase or a refinance does not matter
* No income verification required
* No property appraisal required
* Closing costs must be paid separately from the loan, in other words they cannot be financed
* Middle credit score must be 640 or higher
Discuss your realty/financial considerations with San Francisco’s real estae pros! Call Gary Belkin @ 415-813-5083