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Mansion in Richmond Virginia

No one likes paying for mortgage insurance. To that end, I’ve got some good news!

If you have an FHA loan endorsed prior to June 1, 2009, you have the opportunity to do a rate and term refinance while keeping the same low mortgage insurance rate you currently have.

This is a huge savings opportunity for homeowners with FHA loans. With an FHA loan, there are two different rates you should look at when determining whether refinancing makes sense: the interest rate and the mortgage insurance rate. Mortgage insurance rates have been pushed higher since June 2009, but homeowners with these loans who are looking to refinance have been given a reprieve from the higher rates. Now that you know your mortgage insurance rate won’t change, why would you refinance? Let’s talk about interest rates for a minute.

Interest Rates Are Great

Simply put, interest rates have rarely been better. Now is a great time to refinance to either lower your payment or pay off your mortgage sooner.

When you close, you can choose to pay for prepaid interest points in order to get a lower interest rate. One point is equal to 1% of the loan amount. For context, let’s take a look at where rates were in the final days of May 2009. If you paid for half a point at that time, your rate would have been in the mid-5% range.

Now fast forward to today. For a 0.375 point investment, rates are around 3.4% for a 30-year fixed-rate mortgage. Imagine how much you could save on interest by refinancing with a lower rate. They’re even lower if you choose to go to a 15-year term. Those rates are in the high 2% range.

There’s even the possibility that you can accomplish the same benefits – such as a lower rate or shorter term – with an FHA Streamline refinance. This doesn’t require an appraisal, and less income and asset documentation may be required.

So what are you waiting for? If you have an old FHA loan, go ahead and refinance now to save yourself some money.

This Post Has 4 Comments

  1. I am looking to combine my home equity line to my current mtg and take cash out for home improvements…can that be done with fha?

    1. Hi Ann:

      We do loans involving combining first and second mortgages in the way you’re describing. It can also be done with FHA. If you would like to go over your options and get approved online, you can do so through Rocket Mortgage. If you’d rather get started over the phone, one of our Home Loan Experts would be happy to take your call at (888) 980-6716. Hope this helps!

      Kevin Graham

  2. would like to discuss refinance options an programs also about taking some equity out about $11,000 towards remodeling kitchen area. single house, worth about $375,000.
    owe about $223,000, was built by us 16 years ago.

    phone number *********** call or send text message so I know it is about this email.
    thanks Ron

    1. Hi Ron:

      I’m going to remove your phone number to protect your privacy. We can certainly help you take a look at your options to do a cash-out refinance. The quickest way to get in touch with one of our Home Loan Experts is to give us a call at (888) 980-6716. Hope this helps!

      Kevin Graham

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