If you have been thinking about refinancing an FHA loan or buying a new home with FHA financing, now is the time to act!
Buying a home?
For the potential homebuyers out there, don’t delay if you plan to use FHA financing. You will save money by placing a contract on a home and starting the financing process now, because the FHA’s Up-Front Mortgage Insurance Premium (MIP) and Annual MIP will increase for applications submitted on or after April 9.
Already have an FHA loan?
For those with an existing FHA loan endorsed on or after June 1, 2009, you may be able to save thousands with a lower rate and monthly payment if you apply now for an FHA streamline refinance. Don’t wait; the process is often quick and easy.
After April 9, 2012:
· The Up-Front MIP will increase from 1% to 1.75% of the base loan amount.
· The Annual MIP for 15-year or longer loan terms will increase to 1.25% for loans with LTVs higher than 95% and to 1.20% for loans at less than or equal to 95% LTV.
New fee structure for refinancing older FHA loans.
For those with older FHA loans, i.e., endorsed before June 1, 2009, you may also save money with an FHA streamline refinance. However, the fees for refinancing these loans will be reduced on June 11, 2012 to 0.55% for the Annual MIP and 0.01% of the base loan amount for the Up-Front MIP.
If you are in this group, call for an assessment of your loan to determine if the changes to the FHA fee structure may make it more advantageous to wait to refinance until June 11, 2012.
FHA fees will increase in April.
To take advantage of the current FHA fee structure, you must act now.