In early March, FHA revised its guidelines for refinancing your current FHA backed mortgage with new FHA financing. Many people are trying to be financially responsible by reducing their mortgage interest rate to today's even lower rates, however, because of the way FHA has structured the new Mortgage Insurance Premium (MIP) rate which are based on WHEN your original mortgage was made, the reduction in your interest rate may not reduce your total savings significantly enough to make the costs associated with the refi worthwhile.
The greatest benefit of the new guidelines seems to be for owners who placed their FHA mortgage prior to 5/31/09. It would be worth a phone call* to your current lender to make the inquiry or shop rates with reputable lenders.
If your loan was placed between 6/1/09 and 10/3/10, the revised guidelines may not make it feasible to refi with an FHA backed product. Your lender can give you an estimate of your new monthly payment and compare your existing mortgage payment with the projected mortgage payment.
In either case, and any time you are shopping for mortgage products, make sure your get the Annual Percentage Rate (APR) from your prospective lender. The APR takes all miscellaneous costs associated with your loan into consideration, and will be higher than the rate of interest you will actually be paying on your loan, but allows you to compare apples to apples. If your lender will not give you an APR - move along.
And, don't forget, if you are thinking about an all out move, give me a call!
*a word of warning, though, don't authorize a credit check until you have settled on a lender since every credit check has a detrimental affect on your credit score.
- Lisa Hanley
- A Graduate of the Real Estate Institute (GRI), Lisa Mary Hanley, a Realtor® serving the community for over 25 years, puts her expertise as a Certified Residential Professional (CRP), an Internet Accredited (e-Pro), and pledge of personal attention to the details to work for you in every transaction. “Trust a Professional with your Most Important Investment!”