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I'm about to do a streamline refinance and I just saw this posted today by the FHA:

http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_me...

Key Takeaway:

Article said: WASHINGTON – Today, Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to FHA’s Streamline Refinance Program that could benefit millions of borrowers whose mortgages are currently insured by FHA. Beginning June 11, 2012, FHA will lower its Upfront Mortgage Insurance Premium (UFMIP) to just .01 percent and reduce its annual premium to .55 percent for certain FHA borrowers.

To qualify, borrowers must be current on their existing FHA-insured mortgages which were endorsed on or before May 31, 2009. Late last month, FHA also announced it will increase its upfront premiums on most other loans by 75 basis points to 1.75 percent. In addition, FHA will raise annual premiums 10 basis points and 35 basis points on mortgages higher than $625,500. Read FHA’s new Mortgagee Letter.



This is huge IMO for those of you that financed before May 2009 - rather than paying 1% upfront for my mortgage, I'll be paying .1% - and the annual premium is cut over half - 1.25% to .55%.

I guess I'll be waiting to June to refinance, I don't expect rates to rise any higher in the next coming months.

Member Summary
Most Recent Posts
Hi all. It has been a couple of weeks as well as appropriate time to update this thread regarding FHA Streamline Refina... (more)

tiedyed1 (May. 29, 2013 @ 9:41a) |

I was looking at one of the quote for FHA streamline and shows the lenders credit to off set closing cost. What happen i... (more)

creativefat (Jun. 09, 2013 @ 11:33a) |

The lender credit is for both Closing Costs and Prepaid Expenses (i.e. escrows for taxes and insurance, interest for the... (more)

tiedyed1 (Jun. 09, 2013 @ 4:28p) |

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Sorry for noob question, but Im looking at buying FHA right now, the language in here sounds like theyre jacking up the rate on PMI??? Is this correct?

Sounds like the up front requirement will jump from ~1% to 1.75% and the PMI portion will jump from 1.15 to 1.25% if Im reading this correctly.

jd2010 said:   Sorry for noob question, but Im looking at buying FHA right now, the language in here sounds like theyre jacking up the rate on PMI??? Is this correct?

Yep, they sure are - get your FHA number before April and you're good.

What is meant by "endorsed"? Is this the date of closing, of funding, or of original application, or some other date? And why May 31? Seems a little arbitrary on the surface.

EDIT:

The endorsement date can be found in your settlement packet. Mine was endorsed 7-9-2009, and closed a week later.

RedCelicaGT said:   What is meant by "endorsed"? Is this the date of closing, of funding, or of original application, or some other date? And why May 31? Seems a little arbitrary on the surface.

EDIT:

The endorsement date can be found in your settlement packet. Mine was endorsed 7-9-2009, and closed a week later.


I'm not sure why the cutoff. What were interest rates around 5/31/09? Maybe they figured rates were low enough by then to not have it be a huge benefit to refi to today's rates?

The rate difference is significant. My rate is 5.375.

Gotcha. I closed 3/24/09 at 5% FHA, and stopped following rates at that point, just assumed they went lower.

This sounds promising - I closed May 2008 @ 5.5% and have been itching for a lower rate.

I closed September, 2010. Rate is 4.625, I believe. I've been hoping to refinance and drop ~1%... does this help me at all? It looks like it doesn't (in fact, it looks like it makes it worse (1.75% upfront MIP to streamline refi?))

I am so in on this, I closed on mine in Jan 2009. Hope rates stay steady (or drop! lol)

I will be in on this as well. Will the closing costs on a streamline be less than a conventional refinance? There is no appraisal or credit check so I assume it would be less.


I bought my house in May 2008 at a 6% rate, so I've been definitely wanting to refi for some time here.

skooba said:   RedCelicaGT said:   What is meant by "endorsed"? Is this the date of closing, of funding, or of original application, or some other date? And why May 31? Seems a little arbitrary on the surface.

EDIT:

The endorsement date can be found in your settlement packet. Mine was endorsed 7-9-2009, and closed a week later.


I'm not sure why the cutoff. What were interest rates around 5/31/09? Maybe they figured rates were low enough by then to not have it be a huge benefit to refi to today's rates?


No, rates are down enough to make it worth it since then. They have this same date for the HARP program. I wish someone would give us a good explanation as to why they have choosen this date, other than to "protect" the banks from "loosing" these loans that were originated over the past couple years.

First he gives me $8,000 to buy the house, now this. I'll take it.

tadr said:   I closed September, 2010. Rate is 4.625, I believe. I've been hoping to refinance and drop ~1%... does this help me at all? It looks like it doesn't (in fact, it looks like it makes it worse (1.75% upfront MIP to streamline refi?))
Yes for you it's going to get worse

The reduction is for loans prior to the 2009 cutoff date only
The increase is for newer loans after 2009 cutoff date, so start your refi now

I have a quick question. I qualify under the terms OP described above. I am just about to do a FHA streamline refi from a 5.5 to 4.25 and I am within the range of net tangible benefit etc... With the new rules described above, would it be better to wait until June 11th? or go ahead with the transaction now because of all the raises to the MIP coming in April?
Thanks in advance.

Was your original loan endorsed before of after may 2009?

If after may 2009 , refi now.

If before , you'll save by waiting (assuming rates don't go up)

I bought the house originally on oct 2008 @ 6% FHA . Since then I did refinanced twice(first time on nov 2009 & second time on sep 2010). Am I eligible for refinance again at 0.01% UFMIP and .55% MIP? What does the endorsement date here?

sarulsenthil said:   I bought the house originally on oct 2008 @ 6% FHA . Since then I did refinanced twice(first time on nov 2009 & second time on sep 2010). Am I eligible for refinance again at 0.01% UFMIP and .55% MIP? What does the endorsement date here?


I believe the "endorsement date" is defined per HUD as:


EFFECTIVE DATE OF ENDORSEMENT

A case submitted for endorsement is considered an insured loan as of the date FHA electronically issues the MIC (mortgage insurance certificate).


Each time a loan closes with FHA and MI is required, a new MIC is issued with an endorsement date. Unfortunately for those of us with an original FHA loan endorsed before the 2009 cutoff date but having a subsequent FHA streamline after the 2009 cutoff date are out of luck.

I just can't get a break on being able to refi even lower.

I'm still not sure of the reason why may 2009 is the cutoff. Anyone?

I bought my home in Sept 2008 w 20% dn. I did a rate reduction 4 months later and sit at 4.75. I'm refi'ing right now with Cashcall and right now we are targeting 3.5% with no fees out of pocket. My loan is only 105K so they had to bump up my rate to get the no fee on such a small loan.

He's running it right now as an FHA and we'll see when the appraisal comes in whether I want to stay FHA or put cash in and go back to conventional (If LTV is 80% or less after appraisal).

I feel pretty good about the process so far (been a week) but my guy keeps avoiding my question about locking in this 3.5% and a float down option. I get the idea I'm not locked at all. I duno the rules there, if we have to be ata certain stage in the process to lock or what. Appraisal is scheduled for tomorrow. He said thats the next big hurdle.

Also been watching the rate thread and guys keep referencing the MSB and it being + or - some fraction. I've tried googling and can get a clear understanding of what that means (rates sliding up or down).
It was + like 9/32 yesterday I think or something. Can someone quantify that in simple terms?

RedCelicaGT said:   I'm still not sure of the reason why may 2009 is the cutoff. Anyone?

I believe they decided this date since interest rates were significantly higher - 5.5 to 6%.

RedCelicaGT said:   I'm still not sure of the reason why may 2009 is the cutoff. Anyone?

This date corresponds with the cutoff for HARP refinances, it seems clear this is in response to FHA borrowers being left out of some of the refinance options created by HARP.

lowe41 said:   I have a quick question. I qualify under the terms OP described above. I am just about to do a FHA streamline refi from a 5.5 to 4.25 and I am within the range of net tangible benefit etc... With the new rules described above, would it be better to wait until June 11th? or go ahead with the transaction now because of all the raises to the MIP coming in April?
Thanks in advance.


You're going to have a problem getting the new insurance premiums if you have already started. The dates are based on when your case assignment is requested, if you already started it's almost definite that the case assignment has been issued already.

Keep in mind this will reset the 5 year time period on your mortgage insurance as well. Assuming the value of your house hasn't dropped (big assumption in some areas) most will be able to get rid of their mortgage insurance after 5 years. Make sure you are comparing the new cost vs your current loan with no mortgage insurance if you bought in 2008 or earlier since your MI is going away in a year or less.

Someone above asked about that 2009 date, it is from the time of your last refinance not the time you bought the home so if you refi'd since May 2009 you are out of luck.

In general since mortgage insurance went from .55% in April 2011 to .9% (then 1.15% in the summer) I'm finding it only makes sense for people to refinance that last closed in April-June of 2011. Rates were back near 5% at that time so dropping to 3.75% with little or no fees makes sense (even though your MI is going from .9 to 1.15). Anytime earlier than April doesn't make sense with the .55% MI you currently have (rates were never above 5.25% in the last few years...if you got screwed and are higher than that then maybe it makes sense...) and those that closed prior to May 2009 should wait for the new legislation to kick in. Rates have been under 4.5% since summer 2011 so the savings in that case are not worth it either.

The only other thing that makes sense is dropping to a 15 year especially if at 90% LTV or better since the MI is only .5% and rates are in the low 3's.

so no chance of streamlining if LTV is 125% ?

new home, loan closed in june 2008, no refi

4,875% apr

I purchased my home in March 2010. No refi's. Do I qualify?

alexalna said:   I purchased my home in March 2010. No refi's. Do I qualify?

To qualify, borrowers must be current on their existing FHA-insured mortgages which were endorsed on or before May 31, 2009.

mrkk said:   so no chance of streamlining if LTV is 125% ?

new home, loan closed in june 2008, no refi

4,875% apr


A streamline can be done with no appraisal so LTV does not matter. You cannot raise your loan amount on a no appraisal streamline so you either will come out of pocket with the closing costs or need to have a credit from the lender to cover some or all of it. Since your loan is from before June 2009 you should wait until the legislation kicks in to do it. The mortgage insurance going away I mentioned above would not apply in your case since your loan has to be at an 80% LTV in addition to the 5 year requirement to remove it.

RhizzleBop said:   I bought my home in Sept 2008 w 20% dn. I did a rate reduction 4 months later and sit at 4.75. I'm refi'ing right now with Cashcall and right now we are targeting 3.5% with no fees out of pocket. My loan is only 105K so they had to bump up my rate to get the no fee on such a small loan.

He's running it right now as an FHA and we'll see when the appraisal comes in whether I want to stay FHA or put cash in and go back to conventional (If LTV is 80% or less after appraisal).

I feel pretty good about the process so far (been a week) but my guy keeps avoiding my question about locking in this 3.5% and a float down option. I get the idea I'm not locked at all. I duno the rules there, if we have to be ata certain stage in the process to lock or what. Appraisal is scheduled for tomorrow. He said thats the next big hurdle.

Also been watching the rate thread and guys keep referencing the MSB and it being + or - some fraction. I've tried googling and can get a clear understanding of what that means (rates sliding up or down).
It was + like 9/32 yesterday I think or something. Can someone quantify that in simple terms?


Do not understand why you are getting an appraisal if you are staying with FHA. Also, going FHA will require MIP for 5 years minimum. Going Conventional would be your best option, but then it depends on current appraisal. I do not see how they could possibly be offering you a 30 year no cost loan at 3.5%. Their website shows 3.5% .75 points.

I'm trying to get this straight. I closed in early july 2009, so I have to pay higher MIPs if I do a streamline refi than if I closed in late may 2009. Is MIP premium not reflective of the probability of defualt? Are my chances for default significantly higher because I closed my loan a month after the deadline?

\vent

When does endorsement typically occur compared to the closing date?

As discussed above, mine was approximately 1 week before closing. Now, is that typical? I dunno, but it's a data point.

Another data point - mine was exactly 1 week prior to closing.

My understanding is that you cannot Streamline to a shorter term, correct? Example going from 30 year that I only have 22 years remaining on down to a 15 yr. My lender said I could not without a full blown re-application and appraisal.

Looks like I'll be waiting until June 11th to refi- my 30yr FHA loan with $131,000 remaining that originated in 2004 at 6.083%. I'll then continue to pay what I have been paying (~$1,270/mo), which should be over the top of my new payment to pay it down in less than ~15 years I figure.

What kind of rates are you seeing for a FHA 30 year streamline refinance?

I'm at 4.25% right now and might be looking to refinance.

They quoted me at 4% before the credit check and 3.95% after (I have pretty good credit) in the state of IL.

I got quoted at 3.875% with $3,000 in closing costs.

Edit: I just got off the phone with Wells Fargo (my current lender). They said I needed to wait until June 11th to lock in a rate.

Skipping 286 Messages...
creativefat said:   I was looking at one of the quote for FHA streamline and shows the lenders credit to off set closing cost. What happen if this credit is more then your closing cost ? can you use this remaining balqance for escrow account?

The lender credit is for both Closing Costs and Prepaid Expenses (i.e. escrows for taxes and insurance, interest for the days in the month you are closing).
If there is still an excess credit after all those allowable costs have been covered, the lender should credit the excess towards principal reduction when the loan is funded.
(Not all lenders have the same policies towards principal reduction, so, if this is applicable, make sure you utilize a lender who will!)

-Adam
Old Hippy & Mortgage Pro



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