HUD continues to raise the mortgage insurance premiums on FHA insured loans. "Unfortunately, 98% of all FHA Refi's don't make sense anymore" says Scott Sheldon a senior loan officer and founder of Sonoma County Mortgages. "The mortgage insurance is so high that any monthly savings is eaten up by the higher mortgage insurance paid on a monthly basis."
New Refi Opportunity for homeowners, moving into a conventional loan. Conventional loans go to 95% loan to value, rates are quite lower, and the mortgage insurance on average is 50 basis points lower (or $150 per month lower).
"A homeowner today would be better served moving into a fixed rate conventional loan, considering there is a greater net tangible benefit than an FHA streamline refinance" says Sheldon.
Sheldon has seen an upstick in FHA refi requests. "We show borrowers payments on streamline loans, then on conventional loans, and the wheels start to turn especially on 30 year fixed rates."
Scott Sheldon originates both FHA and Conventional fixed rate home loans. http://www.sonomacountymortgages.com/