Effective June 11th 2012, new rules regarding FHA Streamlines will help some borrower refinance into lower rates.
While everyone is well aware of mortgage rates being at all time lows, access to those low mortgage rates remains tight, with credit score minimums, increasing mortgage insurance premiums and falling home property values.
In the Midwest, St. Louis, Kansas City, and Indianapolis, home values have not been hit as hard, but still, many customers who make their mortgage payments on time have missed out on the benefits of these low rates because of inability to qualify.
Specifically, for those who have a HUD backed mortgage, increasing mortgage insurance premiums have become the largest obstacle to helping borrowers take advantage of lower rates, having gone through numerous premium increases as rates have fallen in recent years.
However, effective June 11th, 2012 some who have paid their FHA mortgage on time will have the opportunity to cheaply save money by lowering their rate, and mortgage insurance premiums(both upfront and monthly)
In order for a borrower to qualify, the following will be needed:
- Must have an existing FHA mortgage endorsed prior to May 31st, ,2009.(Endorsed, not closed)
- Mortgage must be paid on time.
- May be done without an appraisal.
Upfront Mortgage Insurance Premiums (UFMIP) will be reduced from 1.75% currently being charges to .01%(yes. 01%)
Monthly premiums will be reduced from 1.25% on 30 year mortgages over 95% LTV to .55% on most loans.
So What does that translate to?
About $100 on a $175,000 30 year fixed rate refinance compared to today’s FHA mortgage insurance tables.