Not only are FHA mortgage rates at near record lows, but for the first time since 2001, the FHA has reduced its mortgage insurance premiums (MIP) for many U.S. homeowners. Effective as of January 26, 2015, the U.S. Department of Housing and Urban Development (HUD) lowered annual FHA mortgage insurance premiums by 50 basis points from 1.35% to .85% on their 30-year fixed mortgages for new FHA loans of $625,000 or less.
The new rates applies to all FHA loans including the 203k refinance loan, which is commonly used for home construction, FHA Streamline Refinances, and the Back to Work program for consumers with a recent bankruptcy, foreclosure, or short sale.
The FHA Streamline Refinance rule applies to single family FHA loans with terms of 15 years or greater. Should you opt to do an FHA Streamline refinance in order to take advantage of this lower premium, there are certain financing documents you can bypass to make the process easier, such as:
• You will NOT need an appraisal
• You will NOT need qualifying debt ratios
• You will NOT need income verification
The best way to determine any potential money-saving opportunities for you is to contact a mortgage banker today to review your loan terms and whether or not you qualify for a reduction in your mortgage insurance premium. Also, for more in-depth information, read over our Mortgage 101 Handbook.