March 6, 2012

The Administration announced that the FHA will cut its fees for refinancing loans already insured by the FHA.  Fees will be reduced to 0.01% for the up front fee (from 1.15%) and the annual fee to 0.55% from 1.15%.

This will apply to loans originated prior to June 1, 2009.  It is not clear how this will mesh with the recently announced INCREASE in FHA up-front and annual mortgage insurance premiums. A White House announcement does not make it so as this program will need lender participation and the fine details before it is rolled out.  No implementation date has been established.

Link to the full White House Press Fact Sheet HERE.

No question this will make the refinance of an FHA loan more beneficial. When comparing them, you want to consider vehicle restrictions, loan amounts, interest rates, fees, loan terms and the loan approval process. The right fit for you depends on your specific circumstances.  What about the folks that did a streamline refinance in the past year or so… trading off a decrease in the interest rate on the loan with the increase in the mortgage insurance? Those folks are screaming today as they would have been better waiting. Seems to me there should be an automatic roll back for anyone in that position.  FHA is the only beneficiary!

Give us a call or email and we can give you an idea what the terms of a NEW FHA LOAN might be!

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