Just a quick update on a post from last week.
One of the CONS I mentioned in the PROS AND CONS OF THE FHA STREAMLINE REFINANCE article was
- FHA program changes. Chances are when you originally took out your FHA mortgage, you paid 0.5% mortgage insurance (equates to roughly 0.5% X loan amount / 12 months) or $41.67 per month on a $100,000 loan amount. You also paid an Up Front Mortgage Insurance Premium of 2% or possibly 1.5%. Now FHA requires an Up Front Mortgage Insurance Premium of 1%, but the monthly mortgage insurance has increased to 1.10 or 1.15% (depending on loan amount compared to last appraised value). This negates alot of the benefit that a homeowner may have seen.
It appears that HUD is ready to remedy that problem. Rumor has it that a new Mortgagee Letter that should be out in early March that will decrease the Mortgage Insurance Premium for FHA Streamline Refinances. Thus, it will open up quite a bit more savings for those homeowners with an FHA mortgage that have been looking to lower their rate and payments.
The downside? It raises the Mortgage Insurance Premium on all other FHA 30 year purchases and refinances.
Stay tuned for updates on any forthcoming changes.
