FHA PMI Rates 2015

FHA announced that despite some skeptics in Congress, FHA will lower the FHA PMI Rates on January 26th.  The new rates are going down by almost 1/2%.  Because of this reduction, new home buyers will save almost $4000 in five years!

The new FHA PMI Rate change will be the 8th change we’ve seen in the last 6 year, and it’s the first time we’ve seen rates going lower!

I saw a Twitter post on January 2nd that said, “Mortgage Rates LOWEST of the Year!”  I laughed out loud – because, DUGH, 2nd day of the year?!  Of course they are at the lowest point of the year… but the truth is, if you look at Mortgage Rates for the past year, we ARE at the lowest of low points, with rates currently below the 3.5% (3.65 APR) range!

FHA PMI Rates 2015

With the new FHA PMI Rates 2015, folks who already have a FHA Mortgage will save DOUBLE by refinancing to lower mortgage rates, and lower FHA PMI rates.

Question:  Will my bank just reduce my monthly mortgage payments on my FHA Mortgage starting in February?

Answer:  No.  Your mortgage Note with the bank specifies how much your mortgage insurance on your loan is, and what your interest rate is.  The only way to change those two things will be to refinance your mortgage – which CAN BE DONE with no cash out of your pocket!

There are two FHA PMI Premiums charged on every FHA mortgage.  The first is the Upfront Mortgage Insurance Premium, the current rate for that is 1.75%, and this rate is not changing.  If you are looking for a FHA Refinance, and you took your mortgage out in the past 3 years, you could be entitled to a refund of part of your upfront FHA PMI premium!

The second FHA PMI rate is charged on a monthly basis.  This is the rate that’s changing for most folks.  It’s actually calculated on an annual basis, and then divided by 12 to come up with what they charge you each month.

IF you have a FHA Mortgage that was endorsed by FHA PRIOR to June 1, 2009 – you could have a “special” savings, as these folks will benefit from even lower Monthly rates and a lower Upfront fee!

Annual FHA PMI Charges in 2015

Here are the newest FHA PMI Rates for a FHA Streamline Refinance, or a Home Purchase using a FHA Home Loan. We’re showing you the FHA annual / monthly premiums for 30 year loans (there’s really no change for folks with 15 year loan terms).

• 30-year loan terms with loan-to-value over 95% : .85% percent for Annual FHA PMI / multiply your loan amount by .80% and then divide it by 12 to see what you’ll be charged on a monthly basis.
• 30-year loan terms with loan-to-value under 95% : .85 percent for Annual FHA PMI /multiply your loan amount by .80% and then divide it by 12 to see what you’ll be charged on a monthly basis.

This is substantially lower.  Prior to this change, the FHA PMI rate on an annual basis was 1.35%, so it dropped .50 percent.  If you are applying for a $250,000 loan, that’s a savings of close to $100 a month!! 

These are FHA PMI Rates for those who have mortgage loans in NC under the $625,500 limit, which pretty much covers 97% of the state. The FHA Maximum Loan Limits change based upon which county you buy a house in. For most of NC the average County FHA Loan Limit is a little less than $300,000.

If you are in a FHA High Cost Area, and you have a mortgage over $625,500, which only covers a few counties in NC, your FHA PMI Rates will not change.

FHA Streamline Refinance Benefits 2015

FHA changed it’s guidelines so that VERY little is required to qualify for a FHA Streamline Refinance, however, in North Carolina, we have our own State mandated standards, so again – many of the NC Banks can not offer this program the way FHA intended for it to work – WE DO!

FHA says that to qualify:

• Employment verification is not required with an FHA Streamline Refinance
• Income verification is not required with an FHA Streamline Refinance
• Credit score verification is not required with an FHA Streamline Refinance* (See notes below regarding AUS findings)
• A new appraisal is not required with an FHA Streamline Refinance

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 your original mortgage “FHA case number” was pulled prior to June 3, 2013, refinancing may not make sense even though the monthly payment would decrease, because they now require that you keep the FHA PMI in place for the full term of the mortgage, and it will not “age off.”
• If you received your mortgage within the last 3 years, you are entitled to a refund in part of your initial Upfront Mortgage Insurance Premium that was added to your loan amount.
• If you received a $8000 Mortgage Tax Credit, an MCC credit, a Down Payment Assistance Grant – let us know UP FRONT so that we can give you the most accurate information available!  The NCHFA will usually subordinate your granted 2nd mortgage – but there’s paperwork involved.
• You CAN streamline Refinance a property you original purchased as a FHA Owner Occupied home and now rent out.  The Mortgage Interest Rates on those are slightly higher than owner occupied rates, however, it often makes sense to do it – for additional cash flow benefits.  Remember, if you have a VA Loan  that you originally purchased as an owner occupied property and you received PCS Orders and had to rent the home out…  we can probably help you refinance without an appraisal too !
• If someone was originally on your FHA Mortgage, they must remain on the loan in order to qualify for a FHA Streamline Refinance.

Looking for the BEST Mortgage Rate?

FHA PMI rates are set by HUD and are the same for all mortgage bankers.  However, mortgage interest rates can change every few hours! We are able to tap into the mortgage rates available from Banks and Mortgage Companies all over the Country!  At any given point, no matter what program you are looking for – we will have some of today’s best mortgage rates.

Understand that Mortgage Interest Rates and Closing Costs go Hand in Hand.  When someone asks me for a mortgage rate – I ask them which one they want.  I’m not being sarcastic (well, okay maybe a little) but we have interest rates from 2% to 11%.  It depends on the program and the amount of money you want to pay out of your pocket.  MOST of the FHA Streamline Refinance loans we do have NO closing costs.

When you refinance, you “skip” a mortgage payment – we usually use that cash to pay for your closing costs. However, every customer comes in here with different needs.  We listen to your needs, and offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.

We want to help you get the best rate, qualify for the best mortgage or refinance, and help you understand weather a FHA Refinance makes sense based upon the newest FHA PMI Rates.  For some people, it’s a no-brainer… for others, it just won’t be worth the savings.  Call Steve and Eleanor Thorne 919 649 5058 for a detailed discussion of what you need to know about the FHA PMI Rate change, and how it will affect your cash flow!