As of June 10th, 2012 many homeowners with FHA financing in San Diego will be able to take advantage of new guidelines that will help them to refinance into a new San Diego FHA loan with lower mortgage insurance and take advantage of the low rates.
As a San Diego Mortgage Broker, I have seen that over the last few years that it has been more and more difficult for homeowners with FHA financing to refinance using FHA’s streamline program. This is due to the fact that FHA requires a 5% savings from the old mortgage and mortgage insurance payment to the new mortgage and mortgage insurance payment. With rates as low as they are, this would normally not be a problem, but FHA has continued to increase their up-front and annual mortgage insurance premium over the last few years.
In 2009 the annual mortgage insurance was only .55%. Now it has been raised more than double to 1.25%. That increase in the mortgage insurance eats into the savings that the client would get from the lower interest rate and therefore does not meet the 5% requirement. Clients who would see a $200 savings a month on their mortgage payment see an increase of $125 on their mortgage insurance, cutting into the savings and bringing it below the 5% required.
This will change for those San Diego FHA borrowers who originally took out their FHA loan prior to June 1st, 2009. FHA is now allowing those borrowers to obtain a San Diego FHA streamline refinance under special terms. The up-front mortgage insurance will be lowered from the current 1.75% to .01% and the annual mortgage insurance premium will be lowered from the current 1.25% to .55%, which was the rate it was in 2009. This will allow those San Diego FHA borrowers to save the required 5% per month and take advantage of the current low interest rates.
I just worked up a San Diego FHA streamline quote for a client yesterday under these new guidelines. I would be able to offer him a 3.25% rate at 0 points, 3.885% APR and save him $446 per month on a $330,000 loan. His Up-Front Mortgage Insurance would only be $33 and his annual mortgage insurance would stay the same. The other option would be a no closing cost option at 3.5%, APR of 4.07%. In this case I would pay for all his closing costs, up-front mortgage insurance, and his taxes and insurance to start his new impound account. He would be saving $401 a month with no expense for the loan.
I you would like to get a Free Rate Quote of your own on this new San Diego FHA Streamline Refinance program please click HERE or give me a call at 619-312-0612. I am a San Diego Mortgage Broker who is an FHA expert and am willing to answer any questions you may have.