As has been predicted recently the FHA is poised to raise their upfront and monthly mortgage insurance fees once again starting on April 1, 2012. For FHA home purchases and for refinances from non-FHA loans into FHA loans the monthly mortgage insurance fee will go up by 10 bps (annualized) and the one-time up front mortgage insurance premium will jump from 1% of the loan amount to 1.75%.
The good news is that refinancing from one FHA loan to a better FHA loan through the FHA streamline program will reportedly not be subject to these new increased fees. That will be a major help to borrowers in FHA loans already.
If you have an FHA loan now at more than a 5% interest rate contact us in the sidebar to learn more about the FHA streamline program. With the streamline program borrowers can refinance to a much lower interest rate without having to pay the standard closing costs, get an appraisal, or even provide detailed income paperwork in most cases. The FHA’s logic is that if a borrower can avoid 30 day late payments and maintain a credit score of more than 640 at the higher interest rate, the borrower can do so even more easily at a lower interest rate. Contact us in the sidebar to learn more about this and the other available government-backed refinance programs.