FHA recently announced that their monthly mortgage insurance (PMI rates) are being reduced for 2015! New FHA loan applicants will be paying about much less for their monthly MIP compared to 2014. FHA mortgage insurance rates for 2015 will be .85% for max 96.5% financing - down from 1.35% last year!
First before we start, let us provide some clarity on the mortgage insurance subject. All government mortgage programs ( FHA, VA, USDA) require a one-time up front fee that is generally rolled into the home buyers loan. This can be called a Mortgage insurance premium ( MIP) Or in the case of USDA loans it's called a "Guarantee fee" Or in the case of VA loans, the fee is called a "Funding Fee" It's all the same thing, just different names, these up front fees range from 1.75% -2.15% depending on the loan type.
Second, in addition to this one-time up front fee, FHA and USDA mortgages require a monthly premium to be paid. VA home buyers do not pay a monthly cost. This monthly cost ( know as MIP, PMI, etc) is added to the home owners monthly mortgage payment. Most people refer to this monthly mortgage insurance costs as "PMI" or private mortgage insurance. PMI is technically the correct term for conventional loans.. but not FHA loans. Either way, it's all essentially the same thing. FHA's recent announcement was in regards to this monthly fee, not the one-time fee. Please see the chart below. Remember, all home buyers pay the monthly mortgage insurance cost regardless of their loan to value.
Not only is this recent announcement a positive change for new Florida homebuyers using FHA financing, but it also provide a huge opportunity for home owners that already have an FHA mortgage. Existing homeowners that are paying higher mortgage insurance premiums can refinance into a new FHA loan at the new lower MIP costs. In addition, mortgage interest rates are very low as we start 2015, and happen to be near historic low levels. Many home owners may also be able to reduce their mortgage rate at the same time, thus increasing their monthly savings even more. The FHA Streamline refinance program makes refinancing easy, even if you do NOT have any equity in your home. Keep in mind, no new appraisal or home inspection is needed with the FHA Streamline refinance program. The FHA Streamline refinance is designed to be very "Streamlined" just like the name implies with minimal paperwork and hoops to jump through. Contact us today to see if an FHA streamline refi with the new lower MIP makes sense for you. You may be able to give yourself a nice raise!
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FHA PMI rates for 30 year fixed terms. The large majority of FHA loans are 30 year fix terms. |
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Loan Amount |
LTV |
NEW Annual PMI |
Up Front MIP |
|
≤$625,500 |
≤ 95.00% |
.85 % |
1.75% |
|
≤$625,500 |
> 95.00% |
.85 % |
1.75% |
|
Above $625,500 |
≤95.00% |
1.50% |
1.75% |
|
Above $625,500 |
> 95.00% |
1.55% |
1.75% |
|
Loan Amount |
LTV |
NEW Annual PMI |
Up Front MIP |
|
≤$625,500 |
≤ 90.00% |
.45% |
1.75% |
|
≤$625,500 |
> 90.00% |
.70% |
1.75% |
|
Above $625,500 |
≤ 90.00% |
.70% |
1.75% |
|
Above $625,500 |
> 90.00% |
.90% |
1.75% |
Five Stars is Florida's leader in FHA, USDA, VA and Conventional mortgage financing. We can be reached 7 days a week at ph: 800-871-2636
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