FHA Streamline Refinance helps couple lower interest rate, mortgage insurance premium
Mortgage adviser: Dominique Stevens
Property type: Singlefamily home in Novato
Appraised value: $560,000 Loan type: 30-year fixed FHA
Rate: 3.625 percent with .125 percent credit toward closing costs
Loan amount: $540,400
Backstory: Good news is afoot for borrowers with current Federal Housing Administration mortgages, or those anticipating using the FHA to purchase a home. As the nation’s housing market continues to improve, the FHA recently reduced the annual mortgage insurance premiums on FHA loans by half a percent to 0.85 percent
This action will help folks with an FHA mortgage significantly lower their monthly payments, and allow borrowers to strengthen their financial futures.
Stevens was contacted by a couple hoping to lower their monthly pay- ments. They had purchased their home in Novato a year ago for $560,000 with 3.5 percent down payment and a loan amount of $540,400 at an interest rate of 4.5 percent. Their house hasn’t yet appreciated enough to qualify for a conventional loan.
However, they are entitled to the FHA Streamline Refinance, which currently comes in at a much lower rate of 3.625 percent (with .125 percent back to help with closing costs) and they qualify for this new reduction in monthly mortgage insurance, lowering their overall monthly payment by $500 per month. The file was already in underwriting when the new MIP rule came into effect. A new case number was pulled, and the loan closed in 10 days.
No income or asset qualification is required, and no appraisal is required. To qualify, the borrowers need to have made six payments and be current on their mortgage. The lender obtains a credit report only. The FHA Streamline Refinance is a simple and easy way to lower monthly mortgage payments.