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Good News for current FHA borrowers

As you may recall a few months ago I wrote an article informing everyone about the Federal Housing Administration (FHA) increasing their Mortgage Insurance (MI) premiums on all new loans.  This increase was implemented on April 6th of this year and affects any person that is purchasing a home on or after this date with an FHA insured loan.  This is also going to affect any person with a current FHA loan that is looking to refinance in order to take advantage of today’s historic low interest rates.  The problem with refinancing your FHA loan is that the new MI factor would most likely double from what your current MI factor is which would deter anyone from refinancing despite being able to drop your rate by more than 2%.  This is a problem that many, including myself have complained about for the last 2 years.  You can have a borrower with a 6% interest rate on their FHA loan and they could technically refinance to a rate below 4% which would add up to a considerable amount of savings in their monthly payment.  However, the borrower is most likely paying an MI monthly rate of .55% on their current loan and if they refinanced they would be subject to the new MI rate of 1.25% which would practically wipe out any savings they would have received through the lower refinanced interest rate.  With the current MI rates being more than double than the old rates it really doesn’t make much sense for current FHA borrowers to refinance and take advantage of today’s lower interest rates.  Well that is all about to change starting next month! FHA has heard the complaints of many borrowers out there and has finally done something good about it.  Starting on June 11, 2012 FHA will allow current FHA insured borrowers to refinance their current FHA loan and keep their MI annual factor rate of .55%.  This is only for borrowers that took out an FHA insured loan on or before May 31,2009.  If you did take out a loan on or before May 31, 2009 and haven’t refinanced since that time then you may be eligible for this incredible refinance opportunity.  It is likely that your rate is around or above 6% so you can easily drop your rate over 2 full percentage points.  What if I am underwater on my property? No problem.  The FHA streamline refinance program does not require an appraisal nor do you have to verify income.  You do have to be current on your mortgage and have had no late payments in the last 12 months.  If you currently have an FHA loan and want to see if you qualify for this program or any other program, please give us a call today.  To learn more about our company and mortgage products, please feel free to call Dan Longman, President of Priority Lending Corp, at 954-438-3776 ext.11 or email me at prioritydan@bellsouth.net.

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