In the midst of rising costs for FHA and Conventional loans, we are finally seeing some relief with the FHA Streamline Refinance program. This does not go in effect until June 11, 2012, but that’s right around the corner! To qualify for the savings:
- You must be current on your existing FHA-insured loan (no late payments)
- Your current loan must have been endorsed by FHA on or before May 31, 2009 (so if you purchased or refinanced after this date, you do not qualify)
What the savings are:
- Instead of being charged the 1.75% Upfront Mortgage Insurance Premium (currently 1.0%, but it will be 1.75% on 4/1/12), your UFMIP will only be .01%.
- Your Annual Mortgage Insurance amount (paid monthly) will be .55% (not the 1.25% that will be charged beginning 4/1/12).
These changes to the FHA Streamline program will be of significant help. Since FHA costs have risen the past couple of years, it has really limited a lot of homeowners currently insured by FHA to refinance.
My hud loan closed on Feb 27 2009 .. Liberty mortgage tried to do a streamline with me 2 weeks ago I was approved for a 3.7 percent rate but they doubled my MIP from around 40 to 80 something. With a rate reduction from 5.0 to 3.7 this only dropped my payment 37.00 a month .. NOT worth it. In order for me to be 78% LTV I would have to go from my current owed amount of 102,000 to 90,476.10 Does this mean as of June 11th I can now take advantage of not having my MIP rasied? Maybe it could even be reduced?
Hi Jendell, you should definitely wait until the 11th to qualify for the new FHA streamline refi program. The annual MIP that will be charged will be .55% of the loan amount. I don’t quite recall what MIP rates were back in 2009 – I believe around the same (with all the changes, it’s hard to remember and keep track). But you will also be able to take advantage of the current interest rates, which are very low. If you’re in CA, let me know and I can help you with the loan. Thanks for your comment! Irene
I’m planning on doing a FHA refinance after June 11. Can I buy points when doing the refinance?
Hi Kenny, it depends on the program and the market, but if available, then yes, you can pay points to buy the interest rate down.
My wife and I are co-signers with our daughter on an FHA loan. We closed on 18 Feb 2009 and want to take advantage of the change in PMI rules starting on 11 June. My question is, can the loan be streamlined and my wife and I be taken off the loan?
Thanks
Bob
Hi Bob, thanks for your question. Unfortunately, on an FHA streamline refi, the original borrowers need to remain on the loan. Let me know if I can help.
I did a FHA steamline on June 19, 2009 so it looks like I miss the cutoff date. Are there any exceptions that can be made to the May 31, 2009 date?
Hi Brian, sorry, no exceptions. 🙁 In addition, the 5/31/09 date is an “insured by” or “endorsed by” date. Sometimes it can take FHA up to 3 months after a loan closes for them to endorse a loan. So even with homeowners that closed their loan on 5/30/09, they may not be able to take advantage of the streamline cost reductions.
hi irene i do have a fha loan with 5% interest but i closed at 5/2010 and i just wanna know how much i have to paid for doing a streamline or it is whorth doing it ?because my mort+tax+fhains=17333.04 can u help out please
Hi Alex, even though you can improve your interest rate, FHA’s MI rates and UFMIP rate has increased. You can do a streamline refi, but it won’t be at the decreased rates offered to homeowners that closed prior to May 2009. When I’ve ran numbers for my clients that closed in 2010, it didn’t make sense to refinance, unless they had gained 20% equity and could refi under a Conventional loan. If you’d like me to run numbers for you, send me an email at irene@loansbyirene.com with your current loan balance and I’d be happy to do that for you. Thank you!
I refinanced a little after the 2009 cut off date. Will the date be changed or is that a realistic possibility?
Hi Bryan, I doubt it will be changed, but in case it does, I will certainly blog about it. Thank you for your question.