The new FHA Streamline Refinance Program that will begin on June 11, 2012 includes a special tier of FHA PMI rates for mortgage loans that were “Endorsed by FHA on or before May 31, 2009.” But what if you bought a house in September of 2009? Or what if your loan wasn’t set up by FHA (Endorsed for Insurance) by the May 31, 2009 date? Are you just out of luck? NO! The Insurance premium, depending on what you want to do is just going to be a little higher.
If your existing FHA mortgage was endorsed by FHA on or after June 1, 2009, your new FHA PMI (or Mortgage Insurance Premium) will reflect the current PMI rates. As a point of education, there is no such “thing” as FHA PMI. FHA does issue insurance premiums that cover the lender in the event of a default. Most people “think” of that as FHA PMI – so that’s why we refer to it that way.
There are Two Charges for FHA PMI – Upfront and Annual
The Upfront charge for FHA PMI changed on April 1, 2013, and so for the FHA Borrowers with loans endorsed on or after June 1, 2009, FHA Upfront PMI charges will be equal to 1.75 percent of your loan size. So, if your current balance is $100,000, then your upfront mortgage insurance charges will be $1,750. This part of the FHA PMI program will be added to your balance. So, again, if you currently owe $100,000 – your new balance will be $101,750.
This is the amount the FHA Streamline Refinance payments will be calculated on.
Accurate Information! Other websites on this topic are suggesting that you might be eligible for a refund of your previous FHA Upfront PMI Charges. The guideline states that if you received your FHA Mortgage after December 9, 2004 – you could be due a refund. There’s a loop hole in that statement… it’s only for FHA refinances of those loan made during the first 3 years (read more).
If you do a FHA Streamline Refinance, on a loan that was endorsed AFTER June 1, 2009, and it has NOT been more than 3 years, then you might get a slight refund. In many cases, that refund will be deducted from the loan balance. It’s up to your current mortgage holder. Let’s say your loan was endorsed by FHA on July 1, 2009 – and you want to do a FHA Streamline Refinance that closes June, 2012. As long as it closes prior to July 1, 2009 (3 year mark) – you are due a slight refund of the Upfront Premium you’ve already paid. In this case – being 3 full years, you would get a refund equal to 10% of the original Upfront Premium you paid.
For FHA Case Numbers assigned after April 1, 2013, as a FHA Streamline Refinance – and the loan we are refinancing was endorsed on or after June 1, 2009, here are the FHA annual premiums for 30 year loans (call us and we will go over 15 year loan terms)
- 30-year loan terms with loan-to-value over 95% : 1.35 percent for Annual FHA PMI / again there’s also an upfront fee of 1.75% of the loan amount added to the loan for the initial FHA PMI Premium
- 30-year loan terms with loan-to-value under 95% : 1.30 percent for Annual FHA PMI / again there’s also an upfront fee of 1.75% of the loan amount added to the loan for the initial FHA PMI Premium
If you are in a FHA High Cost Area, and you have a mortgage over $625,500 – there are new charges going into effect that will add an additional .25 percent to your annual FHA PMI fees. (doesn’t apply to most of North Carolina).
Important FHA Streamline Refinance Details To Remember
- FHA Has a Net Tangible Benefit requirement. You must lower your monthly payment by at 5 percent to qualify for the FHA Streamline Refinance.
- FHA has different requirements for a FHA Streamline Refinance WITH an Appraisal, and for those WITHOUT an Appraisal.
- You must be current on your mortgage, and at least 6 payments must have been made. In general, this is a program for people who are not having problems making their mortgage payments, they just want a lower interest rate.
If you have questions about getting a FHA Streamline Refinance with no appraisal on a mortgage “endorsed” after May 31, 2009 – call us! There are tons of options to help you get your payments lower in North Carolina! Steve Thorne 919 649 5058.