For all purchase and refinance FHA loans with a term greater than 15 years, approved borrowers will see a .5% MIP reduction. In plain terms, the reduction in MIP is similar to lowering your mortgage interest rate by half of a percent.
Current FHA loan holders may benefit by considering a streamline refinance to gain monthly and annual savings with the reduced MIP, while rates remain at an all time low. With a streamline refinance, borrowers are not required to appraise their home or verify income.
How You Can Save With a Streamline Refinance today
Below is an example of the savings that an average current FHA loan holder may expect to see with a streamline refinance and an MIP reduction.
|Your Current FHA Loan||Streamline Refinance After 1/26/15|
|Principal & Insurance||$1061.55||$942.44|
|Total Monthly Payment||$1,609.97||$1,407.92|
Total Monthly Savings with Streamline Refinance: $202.05
5 Things to Know About the FHA Mortgage Insurance Reduction:
- For all FHA loans the insurance premium will be reduced by 50 basis points (0.5%) on both purchase and refinance transactions.
- Applies to all purchase or refinance FHA loans with terms greater than 15 years.
- There is no change in premium for loans with a term of 15 years or less. The reduction affects all loan types with the exception of FHA streamline refinances made before May 31, 2009. There is no change to the 1.75% upfront mortgage insurance premium.
- With a streamline refinance, there is no appraisal or income verification required.