While FHA fees for purchase mortgages will be going up sharply on April 1st, it appears that fees for FHA “streamline” mortgages will be going down soon. A streamline refinance is for borrowers who have an existing FHA mortgage and wish to reduce the rate, or change from an Adjustable Rate Mortgage (ARM), with a minimum of paperwork and WITHOUT an appraisal. Many borrowers have not been able to take advantage of this because of the increase in the monthly mortgage insurance premiums offset any of the gains produced by refinancing.

The proposed changes for FHA refinances is to reduce the current upfront mortgage insurance premium from 1% to .01%, and the annual premiums paid monthly from 1.15 to .55%. On a $200,000 mortgage, the upfront premium would decrease from $2,000 to $200, and the monthly mortgage insurance would decrease from $192 per month to around $92.

The only catch, so far, is that the new fees only apply to loans taken out before June 1, 2009. I have no clue why this cutoff date was chosen.

Chip Allen

Crestline Mortgage Bankers

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