I received a call from a past client this week that wanted to know about the new FHA streamline mortgage program that has lower mortgage insurance premiums. It seems they received a direct mail piece (can we get enough of those??) that told them they qualified to have lower mortgage insurance and the lower interest rates that exist today.
They were all fired up and called immediately to save hundreds of dollars per month. They filled out the info and they submitted an application. The process went relatively quick for a large mega-bank to get the loan approved. However, seven weeks is an eternity if you deal with Envoy. This is where everything went awry for the clients. Even though they received an application stating the lower mortgage insurance premium and the lower interest rate, the approval came out with much higher mortgage insurance in their monthly payment.
They called to ask me why I thought this happened. Here's what the bank did not ask or research which would have saved them a bunch of time and un-necessary work - when was their current FHA loan endorsed by HUD? Even if you closed prior to the magical date of May 31, 2009, the loan has to be endorsed by May 31 of that year. Many loans that closed in March and April of 2009 were still not endorsed in time to take advantage of the lower mortgage insurance premiums that are available.
How do we insure that we do not get client's excited about a program that may or may not be available? We do the research before taking the mortgage application.
If you do have an FHA mortgage that was closed and endorsed (call me to look it up for you) prior to May 31, 2009 you can take advantage of keeping the monthly MIP at the.55% renewal rate and have the minimal .01% upfront MIP tacked on. With rates as low as they are, you can definitely save money if you haven't refinanced since the beginning of 2009. And the best part of this program? You do not need an appraisal on the house and we can may the majority of your closing costs which keeps your mortgage balance the same...why increase it?
Call me today if I can help!
Read the HUD mortgagee letter announcing the change
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