FHA announced that it will lower up-front and annual mortgage insurance premiums for streamline refinancing of FHA loans endorsed on or before May 31,2009. Effective June 11, 2012, the up-front mortgage insurance premium rate paid at closing will be reduced to .01 percent and the annual mortgage insurance premium rate will be reduced to .55 percent for qualified homeowners. Endorsement dates for FHA mortgage insurance can differ from actual mortgage closing dates. Homeowners interested in streamline refinancing can call their mortgage servicing companies for determining FHA endorsement dates for their loans. Acting FHA commissioner Carol Galante remarked that lowering the insurance premium rates for streamlining FHA mortgages “is one way that FHA can help homeowners who are doing the right thing, paying their bills on time and who want to take advantage of today’s low interest rates.” Homeowners whose home values have fallen and cannot refinance their FHA mortgage loans elsewhere may benefit from this program.
FHA: Streamline refinancing could help millions
FHA estimates that there are approximately 3.4 million households with qualifying FHA mortgage loans with mortgage rates over 5 percent. The average household could save about $250 per month or $3000 annually using streamline refinancing. Providing homeowners with underwater mortgages an inexpensive method of refinancing can prevent foreclosures and provide homeowners with additional cash for paying bills or meeting essential household expenses. FHA asserts that lowering the MIP rates for streamline refinances will not incur taxpayer expenses or jeopardize its mutual mortgage insurance fund.
Low mortgage rates boosting refinance affordability
Refinancing to a lower mortgage rate provides benefits including lowering your monthly payments paying off your mortgage loan faster, as more of each mortgage payment is applied to your mortgage balance. FHA programs also provides refinancing options for homeowners wishing to refinance their non-FHA mortgage loans. Homeowners without enough equity for conventional refinancing options may qualify for refinancing through FHA, which allows for rolling allowable closing costs into the new mortgage amount and will approve refinance mortgages for up to 97.5 percent of your home’s current value. Contact your mortgage lender or FHA approved lenders for more information about FHA loans and current mortgage rates. Comparing multiple quotes assists with finding your best deal on FHA refinancing.
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