Is the FHA Lower Annual Insurance Premium for Everyone?

As we mentioned in a previous post, Lower Annual Insurance Premiums on FHA Loans Create Savings for Homebuyers, the Federal Housing Administration (FHA) lowered their annual insurance premiums from 1.35% to 0.85% of the loan amount in an annual basis (from $112.50  per month to $70.83 per month for a $100,000 mortgage), however this loan is not for everyone.

mortgage calculatorSome homebuyers have mortgage insurance premiums that can be canceled in the future and for those, refinancing with a lower annual insurance premium FHA loan may not be the best fit.  If you applied for an FHA loan prior to June 2013, this lower annual insurance premium could create a short term gain but a long term loss.  For these loans, the mortgage insurance premium is cancelable after 5 years, which means you may not want to refinance and get additional years of paying the mortgage insurance premium.  It could lower the monthly mortgage insurance premium bill, but you will be paying more as the term for the premium would be extended for the life of the loan.  Please make sure loan originators are reviewing the entire loan situation.  Some aggressive loan originators may promise lowering payments without looking at your specific situation, sacrificing short term gain for long term cost.

If you applied for an FHA loan in June 2013 or after, this lower annual insurance premium may be able to improve your financing situation.

If you are located in Ohio, Pennsylvania or Indiana, please call us for a free evaluation of your specific situation before you do anything.

ReCasa Financial Group
614-221-6770
www.recasafinancial.com

 

ReCasa Financial Group   614-221-6770
NMLS #9722 OH: MB.803923.000 IN: 08-0038 LB  PA: Licensed by the PA Department of Banking
130 E.  Chestnut Street, Suite 200 Columbus, OH 43215
Graham Montigny   NMLS # 195412   OH LO 002049.000     IN LO 195412     PA LO 35011
Michael Wolf  NMLS # 85452  OH LO 001440.001
Michael Troutman  NMLS # 319798  OH LO 037303.000