Recently the President and FHA announced a substantial reduction in FHA monthly mortgage insurance premium fees (MIP).
This will take effect on case numbers issued on and after January 26, 2015. Don’t wait to apply though, your loan can be underwritten and be ready to go in advance of this date.
The fee reduction is bringing the cost of MIP down to .85% from 1.35%. In dollars that equals $72.92 a month in savings on a $175,000 loan amount.
We are expecting anyone who has taken out an FHA insured loan in the last 5 years to call about refinancing due to the monthly mortgage insurance savings.
In many cases with increased values and improved credit some current FHA borrowers may be able to refinance from FHA to a Conventional loan with no mortgage insurance required with loan amounts under 80.01% of current appraised value.
First time home buyers and 203K remodel applicants will also benefit from the lower cost loans this month.
