Today HUD issued Mortgagee Letter 2015-01 officially reducing FHA mortgage insurance effective on case numbers issued on or after January 26, 2015. HUD is also allowing existing case numbers (with the current higher mortgage insurance) to be cancelled as long as they were ordered within 30 days from today.
The reduction in mortgage insurance is available for both purchases, refinances and streamline refinances (for borrowers who currently have an FHA mortgage). NOTE: FHA streamline refis of FHA loans that were endorsed prior to June 1, 2009 are eligible for lower FHA mortgage insurance premiums.
For loan terms amortized longer than 15 years, the annual mortgage insurance (paid as part of the monthly mortgage payment) will be:
- 0.85% for loan to values greater than 95%
- 0.80% for loan to values 95% or lower.
There is no change to the mortgage insurance for FHA loans amortized for 15 years or less:
- 0.70% for loan to values greater than 90%
- 0.45% for loan to values 90% or lower.
To determine the amount the mortgage insurance premium will be, simply take the base loan amount, multiply by the premium factor (ex. 0.85%) and then divide by 12 for the monthly premium.
You do not need to delay your FHA loan application! If I can help you with your FHA (or any) mortgage for your home located anywhere in Washington state, please contact me!