Terrific news for new Florida homebuyers and current FHA mortgage holders – FHA announced that starting Jan 26th 2015 all new FHA borrowers and existing FHA mortgage holders will be eligible to benefit from lower FHA monthly mortgage insurance cost. FHA announced the change last week and said the change will save the average FL homeowner close to $1,000 per year. This is great news for new first time buyers thinking about purchasing a home in 2015, in addition to homeowners already received an FHA mortgage over the last few years. The FHA monthly mortgage insurance premium ( PMI, MIP, etc) is going to be reduced nearly in half from its current monthly mortgage insurance levels.
Here is the breakdown - the annual mortgage insurance premium will drop to 0.85% from its current 1.35%. For example, if your loan amount is $200,000, you will save $84 per month under the new MI levels. If you are in a higher cost area where the maximum FHA loan limts are over $400,000 + such as Naples FL and other parts of south Florida ( Monroe, Miami, Dade County, Key Largo, Key West) the monthly savings will be much greater. The upfront mortgage insurance premium will stay the same at 1.75% added to the base loan amount.
So what if you are a homebuyer in the middle of purchasing a home with a FHA financing, or currently in the middle of a FHA loan refinance? If you currently have a FHA purchase or refinance in process you can have your FHA case number canceled. Your lender can then get a new case number issued with the reduced monthly mortgage insurance premium assuming your original case number was pulled within the last month. This may be easier said than done for some buyers that have a contract closing date and can’t delay a closing. Please note none of this applies for case numbers pulled after Jan 26th.
Below we have listed some important factors to remember:
• Florida homeowners with FHA backed home loans can refinance and obtain the lower annual MIP, as long as the original endorsement was after May 31, 2009 (loans older than this likely have a lower annual MIP from years past. The annual MIP was increased from 0.55% to 0.90% in October 2010, to 1.15% in April 2011, to 1.25% in April 2012, and yet once again to 1.35% in April 2013 for borrowers with whom financed 96.5%) Remember, regardless of your current mortgage servicer (Chase, Citi, Bank Of America, etc) we can assist you with your FHA refinance. Contact us 7 days a week at ph: 800-871-2636. Homeowners will want to get their FHA refinance in process ASAP as lenders /banks are expected to be flooded with FHA refinance request in the coming months. Also keep in mind mortgage interest rates also happen to be near all time lows right now, great news!
• The mortgage insurance reduction applies to loan greater than 15 years – Basically just 30 year fixed FHA loans since the 15 year fixed already has the lower MI rates.
• New FHA applicants or existing FHA mortgage holders that have questions are encouraged to contact us (7 days week) by calling 800-871-2636 or visiting www.FiveStarsMortgage.com We are Florida’s local and leading FHA loan resource.
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