HUD announced dramatic changes to their mortgage insurance premiums this week. If you have been considering refinancing your existing FHA mortgage by doing an FHA streamlined, you need to be aware of a couple of dates and which should cause you to either take action now or wait for your refi.
HUD has finally decided to reduce the mortgage insurance premiums on FHA streamlined refinances. HOWEVER it only applies to exisiting FHA loans that were endorsed prior to June 1, 2009. When your loan was "endorsed" is completely different than when your loan closed. HUD may take several weeks to a couple months after closing to endorse (insure) an FHA mortgage. You could have closed in April of 2009 and not have your mortgage endorsed by HUD until after June 2009 and therefore not qualify for the reduced mortgage insurance rates.
If you closed the FHA mortgage you want to streamline refinance prior to May 31, 2009, contact your local mortgage originator to see when your mortgage was endorsed by HUD. If your home is located anywhere in Washington State, I'm happy to help you with your FHA refinance and determining your endorsement date. (Currently HUD does not have a way for consumers to access this information that I'm aware of). IF your mortgage was endorsed by HUD prior to June 1, 2009, you may want to consider delaying your FHA streamlined refinance for a few weeks until June 11, 2012. Mortgage insurance premiums will be dropped, for those who qualify based on the endorsement date, to 0.01% for the upfront funding fee and the annual fee will be cut in half to 0.55%.
UPDATE APRIL 11, 2012: WE ARE ACCEPTING APPLICATIONS FOR FHA STREAMLINED REFI'S with reduced mortgage insurance – you DO NOT NEED TO WAIT UNTIL JUNE 11, 2012 TO REFI!
If your existing FHA insured mortgage was endorsed (or closed) after May 31, 2009, you will want to consider an FHA streamline refinance NOW as mortgage insurance premiums are going up. Remember, it's possible that your loan may have closed weeks before May 31, 2009 and NOT be endorsed by HUD until after the cut-off. Effective on Case Numbers (this is different than your loan application and may take place after your loan application) issued April 9, 2012 and later, mortgage insurance premiums are going up. The upfront premium will be 1.75% and monthly is increasing 0.10 for annual mi premiums. In early June, high balance FHA loans (loan amounts $417,001 to $567,500 in the greater Seattle area) will go up an additonal 0.25% for annual mi premiums.
Bottom line:
- If you closed your FHA loan prior to 2009 with your existing FHA loan, it's probably safe to assume your loan was endorsed by HUD in time to receive reduced MI rates and you may want to WAIT.
- If you closed your FHA mortgage from early 2009 to May 2009, you may need to check with your mortgage originator to see when your loan was endorsed.
- If you closed your FHA mortgage from June 2009 or later, odds are you do not qualify for the reduced rate and, if you don't act quickly (March is your last month) to start your FHA streamlined refinance, the higher mortgage insurance rates could make it so that it's no longer worth while to refinance despite current low rates. REFI NOW if you are interested.
Don't delay – check out your options now! Remember, FHA streamlined refinances do not require an appraisal – it does not matter what the current value of your home currently is.
As I mentioned, I am happy to help you with your mortgage needs with homes located anywhere in Washington, where I'm licesned to originate mortgages.
From what I can tell, the MIP for loans closed in early 2009 was 0.55 so other than being able to refi with a smaller upfront MI and possibly a lesser interest rate, there will be no monthly savings, right? From what I recall rates in early 09 in the 4s so the rate difference would be about 1 percent, right?
possibly however whether or not it makes sense to refi may depend on what the new mortgage insurance premiums will be. The longer people wait to find out, may cause them to run out of options if they don’t qualify for a reduced premium…and if they closed in early 2009, they “might”… however some FHA loans take a couple months to be insured by HUD so people need to act quickly WHILE they options.