Sunday, June 3, 2012

Changes to FHA Streamline Refinance To Benefit Borrowers

Changes to FHA Streamline Refinance To Benefit Borrowers

Another change has been announced for the FHA streamline refinance program. This program has always been an FHA perk because of its simple and easy structure provided there is no cash out. New changes to the FHA streamline refinance have been designed to benefit borrowers with lower premiums to pay, both upfront and annual.
Recently, in order to increase the FHA streamline refinance, FHA changed their lender stipulations so that this mortgage product would not be part of a lender’s rating which was stopping many lenders from offering it to existing FHA borrowers. Now FHA has gone a step further. According to HUD, beginning June 11, 2012, the FHA upfront mortgage insurance premium (UFMIP) will be .01 percent and the annual mortgage insurance premium will be .55 percent for anyone who refinances an existing FHA mortgage with an FHA streamline refinance provided no cash is taken out. In order to qualify, the existing FHA mortgage must have been endorsed on or before May 31, 2009 and the borrowers must be current with their mortgage payments. Approximately 3.4 million borrowers have FHA mortgages that were endorsed prior to this date with annual mortgage rates at 5% or higher.
The FHA streamline refinance does not require any verification of employment, income, assets or credit nor does it require an appraisal. This is what makes it especially appealing for borrowers who owe more on the mortgage than the property value.
These changes to the FHA streamline refinance will benefit borrowers who will save with both lowerFHA mortgage rates and lower premium fees. Current FHA 30 year fixed mortgage rates are at 3.250%. The average savings is estimated to be approximately $3,000 per year or $250 per month according to HUD. Since FHA is consumer friendly and works with low to medium income families who want to become homeowners, it is only fitting that this would become another strategy to support responsible FHA borrowers who have been left out of the refinance circle. On the other end, it is another step towards helping the housing recovery that is still on the mend.

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

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