Great time to refinance mortgage Chicago
The comination of all time low mortgage rates and the recent reduction of the FHA annual mortgage insurance premium by HUD from 1.35% to 0.85%, there cannot be a better time to refinance mortgage Chicago. Chicago, Illinois has one of the highest real estate values and average homeowners have higher than the average $271,000 maximum FHA mortgage amount. In fact, the four counties in Chicago ( Cook County, DuPage County, Will County, and McHenry County ) is considered high cost areas the the FHA loan limits is capped at $365,700 instead of the normal FHA loan limit of $271,000. Mortgage rates also is at a two year low and homeowners can not only take advantage of the lower FHA mortgage insurance premium to save thousands of dollars but homeowners can also take advantage of the recent all time mortgage rates that is offered in the marketplace. Low mortgage rates plus reduced FHA annual mortgage insurance premiums scream time to think about paying less for mortgage.
HUD reduces FHA annual mortgage insurance premium
On January 26, 2015, the Department of Housing and Urban Develpment, also referred to as HUD, has lowered the FHA annual mortgage insurance premium from 1.35% to 0.85%. This is a 0.50% lifetime annual reduction in FHA mortgage insurance premium and it can save tens of thousands of homeowners in the Chicagoland area, where the average FHA loan size is substantially larger than other parts of the state. Any homeowner who have purchased a home 2011 or later can take advantage of the substantial saving from refinance mortgage Chicago. FHA lowering MIP also benefits home buyers who have higher debt to income ratios or home buyers get more buying power. Home buyers can either save money or get much more buying power thanks to HUD.
Mortgage rates at 2 year low to update your payment plan
Mortgage rates have not been this low since May 2013 where FHA mortgage rates hit a historical low of 3.25%. FHA mortgage rates then started creeping up to hit an all time high of 5.0%. Current 30 year fixed FHA mortgage rates are at 3.75% where homeowners who have purchased their home as early as six months ago can get a net tangible asset by refinance mortgage Chicago. With the combination of the FHA annual mortgage insurance premium reduction and the low mortgage rates, now will be an ideal time to pay less for mortgage.
Reasons to refinance mortgage Chicago
The main reason to update your mortgage is to lower the monthly housing payments and save money by getting a lower interest rate. Here are the advantages of refinancing your current home loan.
1. Eliminate your FHA mortgage insurance: For homeowners who currently have a FHA loan and qualify for a conventional loan, they can refinance their current FHA loan to a conventional loan to eliminate their FHA mortgage insurance premium. There is no mortgage insurance required if you have at least 20% equity on your home. If you have less than 20% equity in your home, you can still avoid paying private mortgage insurance on your conventional loan with the lender paid mortgage insurance conventional loan program. It is referred to as LPMI.
2. Lower your monthly payment by taking advantage of FHA mortgage insurance reduction: HUD’s recent lowering of the FHA annual mortgage insurance premium from 1.35% to 0.85% can save current homeowners a lot of money. The homeowner needs to realize at least a 5% net tangible benefit, which means that their overall monthly housing payment needs to be reduced by 5% in order for the refinance be worthwhile for the homeowner.
3. Super low mortgage rates: The combination of today’s super low mortgage rates and the reduced annual FHA mortgage insurance premium makes it a formula of major savings and a green light to refinance mortgage Chicago.