March 6th, 2012 1:26 PM by Kathy Delbridge
Borrowers With Existing FHA Loans Get a Big Refinance Boost - Upfront and Annual MIP Being Reduced
In a press conference dated 3/6/12, President Obama announced that borrowers with existing FHA loans will receive a huge boost, due to the Upfront Fee and the Annual MIP being reduced.
This announcement should help many existing FHA borrowers save more money on their Streamline Refinance loans, compared to current MIP rates they have been receiving after the Annual MIP increased in Oct 2010 from .55% to 1.15%.
The new fees are for borrowers whose FHA loans were issued before June 1, 2009. An estimated 2 to 3 million borrowers could take advantage of the savings, which could reduce mortgage payments for the typical FHA borrower by about a thousand dollars a year, according to the administration.
Borrowers who refinance their existing FHA loans will pay an upfront insurance premium equal to 0.1% of the mortgage amount -- $100 for a $100,000 loan -- plus an annual fee of 0.55%.
To read more on this topic, please click on this link:
This is GREAT news for existing borrowers with FHA loans, who have wanted to refinance to today's lower interest rates, but their MIP payment was doubled, so it cut into their refinance savings.
In my opinion, this will be a boost. If you are a homeowner that is able to take advantage of this additional savings, get started while the rates are still low and be sure to apply your savings appropriately.
Make it a GREAT DAY!