Two years ago, the Federal Housing Administration implemented a rate cut that would turn its fortunes around. Up to that point, the agency’s program had been dealing with a slew of high delinquency rates and foreclosures. Reducing annual fees, at a time when interest rates were at their lowest, proved to be an excellent strategy. The move brought about more mortgage originations. A surge in new loans enabled the FHA fund to reach its most stable levels since the housing slump of 2012.
On Monday, the Federal Housing Administration did it again, lowering mortgage insurance rates by a quarter of a percent, making it more affordable in the process. The MIP for an FHA loan is currently at 0.85 percent of the mortgage value. Soon, the figure will go down to 0.60 percent.
Today’s reduced MIP may not have the same effect as it did then. Mortgage rates have increased after Donald Trump won the presidency. Nonetheless, it’s welcome news for many.
IMPACT ON FHA STREAMLINE REFINANCE
The reduced MIP premium isn’t just for new home loans. According to the U.S. Department of Housing and Urban Development, people who refinance their existing FHA mortgages on or after January 27 stand to benefit from the new rate. Should you choose to refi, you could only be paying 0.60 percent of your new mortgage value.
True to its goal of making homeownership more accessible, the FHA Streamline Refinance is a loan product that makes remortgaging a whole lot easier.
We can help you find an FHA lender.