On March 7th HUD announced that FHA mortgage insurance is going up on April 9th for ALL FHA loans. A .10% increase.
Not only that but FHA is raising the upfront mortgage insurance premium from 1% to 1.75%
THEN they announced some good news – For case numbers assigned after June 11, 2012 which are refinancing an FHA loan which was endorsed prior to June 1st 2009 there will be a decrease to the monthly mortgage insurance to just .55%.
Now this is huge because rates were anywhere from the high 4’s to mid 5’s in 2009 and FHA mortgage insurance was .55%. Since then, or course, we have seen rates go down but mortgage insurance keeps going up. Every year!
Let’s take a look at an example – Say you have a $300,000 Loan
30 Year fix 5.25% Payment = $1656 MI .55% = $137.50 Payment = $1793
30 Year Fix 3.75% Payment = $1389 MI 1.15% = $287.50 Payment = $1676
*After June 11 2012* 3.75% (est) Payment = $1389 MI = $137.50 Payment = $1526
So this is a great step in the right direction for helping FHA homeowners who don’t want to throw away money on monthly mortgage insurance.
If you are a homeowner looking to see if you are eligible contact me to see when your FHA loan was endorsed. If you are a Realtor make sure you dig through your closed database and see if your clients qualify. There is never a better time to ask for a referral than after you save somebody Money.
If you need further assistance please feel free to comment, call 510.282.5456 or email firstname.lastname@example.org