With more than two million homes nationwide in some stage of foreclosure, the US housing industry is in desperate need of a change. Millions of homeowners are making extremely high mortgage payments each month on properties that cost more than they are actually worth. According to a Harvard housing study, housing wealth dropped 57% between 2006 and 2011, leaving millions with debts that are higher than the value of their properties and the likelihood of foreclosure a real threat.
Luckily, the FHA has reformatted their streamline refinance initiative and has made it easier for millions to save money on their mortgages. Those who have an FHA home loan that was issued before June 1, 2009 are able to refinance their home in as little as 30 days with no up-front costs. The new FHA streamline refinance initiative is aimed at helping over 3.5 million homeowners who have FHA loans that currently carry interest rates above 5%. These homeowners have the option to refinance with no money down and save over $200 each month on their mortgage payments.
The streamline refinance program has reduced the up-front mortgage insurance payment by over 50%, and has lowered the PMI to either zero or .05% of the purchase price, depending on how much is still owed on the property. These two reductions in fees will save potential refinance applicants over $3,000 immediately on their refinances. If homeowners have paid over 20% of their home loan, they aren’t required to pay PMI at all.
In addition to the reduced fees, homeowners no longer need to apply for or pay for a credit check, employment verification, or have a home appraisal done on their property. These costly and time consuming requirements of past refinance programs have been eliminated. Homeowners only need to have received their home loan on or before June 1, 2011 and have been current on their loan for at least 12 months to qualify for the refinance program.
If you have an FHA home loan and are still paying a high rate on your loan, you may qualify for the new FHA streamline refinance program. Consider applying for the program and save yourself thousands of dollars over the life of your loan.