FHA Mortgage Insurance & Streamline Refinance in MN and WI
FHA Loans More costly after June 3, 2013
Minneapolis, MN: FHA loans are having another change starting June 3rd, 2013. The change comes in two areas:
1) Monthly mortgage insurance is being added to some loans that previously didn’t have it. For the vast majority of FHA loans, this is a change that will effect next to nobody, as most FHA loans have mortgage insurance. For example, if you had a 15-yr FHA loan, and you put at least 22% down, you currently wouldn’t have PMI. Under the new rules, you will.
2) FHA mortgage insurance, which currently goes away once your loan reaches 78% loan-to-value, will now be on most FHA loans for the entire term of the loan. Here is a quick breakdown of the new mortgage insurance guidelines:
FHA Mortgage Insurance (PMI CANCELLATION – ALL FHA loans after June 3, 2013
- UNDER 90% loan-to-value at START of loan: 11-years
- 90% loan-to-value of higher at START of loan: Life of loan – never goes away
While this sounds terrible, two items jump to my mind:
- Whenever possible, try moving to a 5% down conventional loan. Just a little more out-of-pocket will currently save you a LOT of money in PMI monthly,AND it can still go away as early as 80% loan-to-value.
- Standard FHA loans with just 3.5%, on average, will have PMI for about the first 10-years anyway. So for most people, the new life-of-loan mortgage insurance on FHA loans is meaningless unless you are still in the house after 10-years.
As always, contact a local LICENSED mortgage professional to assist and answer questions. Don’t assume.
FHA streamline refinance loans are great for refinancing to today’s low fixed mortgage rates! We are an approved FHA Lender that allows more people to qualify under the flexible credit guidelines. Our clients love the low fixed rates and security of a government-insured loan.
Fast Closings / MN based lender
NO Appraisal Option
Special refinance program if you currently have an FHA home loan