New FHA Refinance Program Targets Mortgage Insurance Premiums.
The FHA is introducing changes to its Streamline Refinance Program to increase its accessibility to struggling yet responsible homeowners.
The new FHA mortgage insurance premiums will enact price cuts to the Upfront Mortgage Insurance Premium (or UFMIP). As of June 11, the new UFMIP rate will be a mere 0.01%, while the Annual Mortgage Insurance Premium (MIP) will drop to 0.55% for “certain FHA borrowers”.
“So On a $200K FHA Streamline refinance, the upfront mortgage insurance premium cost would have been $2000 in up front cost and will now be $20.”
The 2012 FHA Streamline Program applies to borrowers whose mortgages are A) backed by the Federal Housing Authority, B) have an endorsement date no later than May 31, 2009. They must be able to demonstrate that their home values are lower than what they are paying on their mortgages.
New low FHA mortgage insurance plus low rates equals big savings.
According to the FHA’s estimates, the average household (out of 3.4 million who are eligible) can save $3,000 annually through a streamlined refinance, without needing any new underwriting.
With these price cuts in place, the 2012 FHA Streamline Program will enhance the opportunity for more homeowners with underwater mortgages to stay in their homes and stabilize the housing market in their communities.
These changes will apply to all single-family mortgages insured through FHA, except for: Section 223(e) (“declining Neighborhoods”), Section 247, (Hawaiian Homelands), Section 248 (Indian Reservations), and Home Equity Conversion Mortgages (HECM).
If you have a mortgage insured by the FHA, contact your lender to confirm your eligibility for a streamline refinance.