Today HUD announced that beginning June 11, 2012, FHA will REDUCE the cost for an FHA streamlined refinance for FHA insured mortgages that were originated prior to June 1, 2009. A mortgagee letter will follow to make the following changes official:
Upfront mortgage insurance (UFMIP) will be reduced to 0.01% (from 1.00%).
Annual mortgage insurance (typically paid monthly) will be reduced to 0.55% (cut in half from 1.10%).
This is great news to those who originated their FHA loans prior to June 1, 2009. Once I receive the mortgagee letter from HUD, I'll be sure to update you. We'll need clarification on how HUD defines "origination". UPDATE: FHA's Mortgagee Letter clarifies that loans must be "endorsed" by HUD prior to June 1, 2009. This is different than your closing date and typically takes place weeks after closing.
FHA streamlined mortgages are popular right now considering today's low mortgage rates and that they do not require an appraisal.
Currently, a Seattle area home owner doing an FHA streamlined refinance with a loan amount of $400,000 and credit scores of 720 or higher would have a rate of 3.750% (apr 4.449) with a principal, interest and mortgage insurance (PIMI) payment of $2,234.59. With the proposed reduced FHA mortgage insurance, assuming the home owner originated their FHA loan prior to June 1, 2009, their PIMI payment would be $2,034.45 (apr 4.071): a difference of $200 per month!
If you would like more information about refinancing your FHA insured mortgage for your home located anywhere in Washington, please contact me. I have been originating FHA insured mortgages for Washington home owners since April 2000 at Mortgage Master Service Corporation and I'm happy to help you.