Good news is coming for Georgia homeowners with current FHA loans on those homes. The Streamline FHA refinance program has been around for a long time; but about a year ago HUD increased the monthly cost of mortgage insurance for FHA loans, and next month that cost will rise, yet again.
So how is that good news? Well, as of June 11, 2012 the cost for Mortgage Insurance (read: PMI) for existing FHA loans will drop back to what it used to be when those homeowners go to refinance into a new FHA loan. And that opens the door to make the whole thing worthwhile, especially if rates stay anywhere near the lows that they are seeing now. The caveat is that this is only for FHA loans that were originated prior to June, 2009.
Here is what that savings means to current FHA mortgage holders, based on a $200,000 loan amount:
Current MI for FHA loans: 1.25% x $200,000 loan amount = $2,500 per year / 12 months = $208.33 per month.
New MI after June 11, 2012: 0.55% x $200,000 = $1,100 per year / 12 months = $91.67 per month.
That is a savings of $116.66 a month or about $1400 per year. What could you do with an additional $1400 a year?
And if your loan amount is higher or lower, just calculate accordingly. The savings will be substantial. And, even better, the Up Front portion of the MI that gets added to the loan amount will reduce from its current 1% down to .o1%. Right. Almost nothing.
As you may or may not know, a Streamline FHA refinance is very, very simple to get approved for. An overview of qualifying for a Streamline FHA refinance is:
- Must have an existing FHA loan with no late payments in the past 12 months
- In this case the FHA loan must have been in place prior to June, 2009
- No income verification
- 620 credit score
- No Appraisal needed
- Lender Paid closing costs are available – so a no closing cost loan.
So, if you meet those criteria and want to save money every month, then Click Here for a free rate quote.
Or, just call us at 1-800-MY-LOANS (1-800-695-6267).
Oh, if you don’t have an FHA loan, but do have a conventional loan, then you may be eligible to refinance under the HARP 2 refinance program.