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SAY WHAT?
NO APPRAISAL - Original Purchase Price used as Value Underwater? Owe twice what your home is worth? NO PROBLEM NO Employment verification No Income verification No Credit score verification
WHO QUALIFIES? 1. 2. 3. 4. You can be out-of-work without income with a terrible credit rating and having lost all of your home equity -- and yet, you will still be approved for the FHA Streamline Refinance program.
The FHA Streamline, HARP 1 and now - HARP 2 are programs that will have many homeowners jumping for joy. And if you're like me, you might be surprised to find yourself a little, lets say giddy about refinancing by the end of this article. In April 2011, while the rest of the world was making it harder to get approved for a mortgage, the FHA was making it easier. Here are the facts...
population -- must be either (1) Paid by the borrower as cash at closing, or (2) Credited by the loan officer in full. The latter is called a "zerocost FHA Streamline". Appraisals Not Required The FHA isn't concerned about home value -- it's insuring your loan regardless. Therefore, the FHA does not require appraisals for its Streamline Refinance program. Instead, it uses the original purchase price of your home, or the most recent appraised value, as its valuation point. Homes that are underwater are still FHA Streamline-eligible.
1. Employment verification is not required with an FHA Streamline Refinance 2. Income verification is not required with an FHA Streamline Refinance 3. Credit score verification is not required with an FHA Streamline Refinance
And, as mentioned earlier, there's no need for a home appraisal, either. Put it all together and it means that you can be (1) out-of-work, (2) without income, (3) with a terrible credit rating and (4) having lost all of your home equity -- and yet, you will still be approved for the FHA Streamline Refinance program.
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1. Loans that replace FHA-backed mortgages endorsed before June 1, 2009 2. Loans that replace FHA-backed mortgages endorsed on or after June 1, 2009.
Refinancing an "old" FHA mortgages entitles FHA homeowners to lower MIP. Refinancing a "new" one does not.
FHA Streamline Refinance MIP Rates (For Loans Endorsed Before June 1, 2009)
If your existing FHA mortgage was endorsed prior to June 1, 2009, your mortgage insurance premiums have been "grandfathered". You can refinance via the FHA Streamline Refinance program and pay reduced rates for both for upfront MIP and annual mortgage insurance premiums.
Upfront MIP
Beginning for FHA Case Numbers assigned on or after June 11, 2012, and for loans endorsed prior to June 1, 2009, the new FHA upfront mortgage insurance is equal to 0.01 percent, or 1 basis point. So, for example, if your FHA Streamline Refinance is for a new $100,000 mortgage, the FHA will assess a $1 upfront mortgage insurance premium (MIP) to be paid by you at closing. The FHA automatically rolls the $1 payment into your new loan balance. This is a huge discount over the FHA's standard UFMIP payment of 1.75%.
Annual MIP
Meanwhile, for FHA Case Numbers assigned on or after June 11, 2012, and for loans endorsed prior to June 1, 2009, costs for the other type of FHA mortgage insurance -- annual MIP -- moves to a standard 55 basis points.
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15-year fixed rate mortgages with LTVs of 78% or less pay no annual MIP. Case numbers assigned prior to June 11, 2012 will still use the current FHA mortgage insurance schedule: 15-year 15-year 30-year 30-year loan loan loan loan terms terms terms terms with with with with loan-to-value loan-t0-value loan-to-value loan-to-value over 90% : 0.50 percent annual MIP under 90% : 0.25 percent annual MIP over 95% : 1.15 percent annual MIP under 95% : 1.10 percent annual MIP
Note that there is no "jumbo FHA mortgage premium" for FHA mortgages that pre-date June 1, 2009. This is a feature for loans endorsed on or after June 1, 2009 only..
Upfront MIP
For FHA Case Numbers assigned on or after April 9, 2012, and for loans endorsed on or after June 1, 2009, the FHA's new upfront mortgage insurance will now equal to 1.75 percent of your loan size. If your FHA Streamline Refinance is for a new $100,000 mortgage, in other words, beginning April 9, 2012, it will require a $1,750 upfront mortgage insurance premium (MIP) to be paid at closing. Upfront MIP is not paid with cash, though. Rather, the FHA automatically rolls the payment into your new loan balance. Not all FHA homeowners will pay this full amount, though. One great thing about the FHA Streamline Refinance program is that the FHA offers refund on previously-paid upfront MIP so long as you're still within the first 3 years of your mortgage.
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As an example, refinancing after 11 months grants a 60% refund, but refinancing after 12 months reduces that refund to 58%. This is why is rarely a good idea to "wait to refinance". With the FHA Streamline Refinance, the sooner you refinance, the bigger your MIP refund. You can review your own FHA mortgage insurance refund chart at top. Note that FHA mortgages with assigned Case Numbers prior to April 9, 2012 require just a 1.000 percent upfront MIP premium.
Annual MIP
For FHA Case Numbers assigned on or after April 9, 2012, and for loans endorsed on or after June 1, 2009, the FHA's new annual mortgage insurance premiums are rising across the board. The new schedule, for loans with case numbers assigned on or after April 9, 2012: 15-year 15-year 30-year 30-year loan loan loan loan terms terms terms terms with with with with loan-to-value loan-t0-value loan-to-value loan-to-value over 90% : 0.60 percent annual MIP under 90% : 0.35 percent annual MIP over 95% : 1.25 percent annual MIP under 95% : 1.20 percent annual MIP
15-year fixed rate mortgages with LTVs of 78% or less pay no annual MIP. Furthermore, beginning June 11, 2012, all FHA mortgages made for $625,500 or more will be subject to an additional 0.25 percent annual mortgage insurance fee. A Los Angeles, California homeowner, therefore, using the FHA's full $729,750 local loan limit for a lowdown payment, 30-year fixed rate mortgage will pay annual mortgage insurance premium of 1.50% to the FHA, or $912 per month. Loans made prior to April 9, 2012 will use the old FHA mortgage insurance schedule: 15-year 15-year 30-year 30-year loan loan loan loan terms terms terms terms with with with with loan-to-value loan-t0-value loan-to-value loan-to-value over 90% : 0.50 percent annual MIP under 90% : 0.25 percent annual MIP over 95% : 1.15 percent annual MIP under 95% : 1.10 percent annual MIP
There is no "jumbo FHA mortgage premium" for loans made prior to June 11, 2012. Note that mortgage insurance payments are included in the FHA's Net Tangible Benefit requirement. You must lower your monthly payment by at 5 percent to qualify for the FHA Streamline Refinance.
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