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Streamline refinance

I contacted my bank today about an FHA streamline refinince. It's available and would save me nearly 200 dollars a month. The PMI, however would increase in such a way as to negate any savings to my note. Is this normal? If so, what's the point of an FHA streamline? Or should I keep shopping around?
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August 13 2012 - Disston Heights
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Hello Jnpoche111,

It all depends on when you had originally closed on your loan.  If it was before June 2009 then you should not have a mortgage insurance rate increase however if it was after that then you will have the current mortgage insurance premiums that are offered and I am sure that is higher than what you are paying as they have increased practically every year after 2009 which will offset your overall payment savings. 

I hope this helps.

Kind Regards,

Al Norman
Branch Manager
Casselbery, FL
PRMI

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August 13 2012
Sad but true if you purchased or refinanced the property after 6/2009.  The MIP virtually doubled, so it is a significant increase. Only option would be if your loan to value is sufficient - 97.75% or lower and you can qualfiy, is to do an FHA 15 yr fixed loan.  The MI would not be much higher than your  current MIP, and rate could be in low 3's with much if not all of your closing cost paid by lender credit.  If the 15 yr payment is not with in your budget, then a conventional 30 yr might be an option if you have at least 5% equity.
What is value of property, your loan balance, and current rate?
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August 13 2012
al is right. i close a lot of FHA streamlines. based on the info u provided, it sounds like you got your loan after june of 2009. FHA released a mortgagee letter earlier this year, here is the link to that letter: http://portal.hud.gov/hudportal/documents/huddoc?id=12-04ml.pdf
this letter outlines all the changes to the upfront as well as annual (paid monthly) mortgage insurance premiums.

that being said, i dont see how the new pmi would completely negate the savings on the new loan without knowing more info. current FHA 30 year fixed rates for streamline refi are in the mid 3's. if your current note rate is in the low to mid 4's, then i would tend to agree with you that the savings would be minimal or none at all. keep in mind that when processing an FHA streamline, you typically are not increasing your loan balance by more than one months interest. so even if you were to save $50-100, it may still be worth doing because you are not trying to recoup thousands of dollars in closing costs.
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August 13 2012
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Thanks for the info. My LTV is about118 and current intrest rate is 5.5. So I guess I'm out in the cold.
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August 13 2012
 
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Streamline refinance
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Latest reply by jnpoche111
August 13 2012 | 4 answers
  • Posted by jnpoche111
  • In Refinance
  • August 13 2012
Mortgage Rates
 
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