Homeowners who have purchased their homes in the past six or more months should definitely consider refinancing their current home loan due to mortgage rates being at a 20 month low. All mortgage rates across the board, FHA loan, VA loan, USDA loan, Conventional loan, portfolio loan, and Jumbo loan are at a 20 month low and most mortgage industry analysts are predicting that mortgage rates will increase the second half of 2015.
FHA Lowers Annual Mortgage Insurance Premium
In an unexpected move, the Federal Housing Administration , also commonly referred as FHA, has announced that from effective January 26, 2015, FHA will be lowering the FHA annual mortgage insurance premium from 1.35% to 0.85% which is a lifetime 0.50% reduction of the FHA annual mortgage insurance premium on a 30 year fixed rate FHA insured mortgage loan. This is great news and tons of saving for home buyers and homeowners who are thinking of refinancing their current mortgage loans. Homeowners can save hundreds of dollars per year and tens of thousands over the course of their FHA loan by taking advantage of the FHA annual mortgage insurance premium reduction as well as the lowest rates in 20 months. The two combination yields tons of savings. For example, if you have a $250,000 FHA insured mortgage and are paying the old FHA annual mortgage insurance premium of 1.35% , your monthly FHA mortgage insurance premium is $281.25. By refinancing your FHA loan with the same interest rate, your payment will be reduced to $177.08 per month with the new 0.85% FHA mortgage insurance premium. This reduction in the FHA mortgage insurance premium will save you $104.17 per month even without lowering your interest rate. Your new interest rate will be most likely lower than your old interest rate so your savings may be significant which can save you tens of thousands of dollars over the life of your FHA loan. There will be no closing costs and you can just do a FHA Streamline Refinance where no appraisal is required, no credit is required, and no income verification is required.
FHA Streamline Refinance
If you are a homeowner with a current FHA loan and have been timely on your mortgage payments for the past 12 months, you will qualify for the fast track FHA streamline refinance. Refinancing your current FHA loan through a FHA Streamline Refinance mortgage loan requires no appraisals, no income verification, no credit scores, and no asset verification. You can have lousy credit scores and bunch of recent late payments as long as it is not your mortgage payments and still qualify on a FHA streamline refinance mortgage loan. The only thing required is a copy of your most recent mortgage loan statement from your mortgage loan service provider and a copy of your mortgage note.
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