That's because the FHA reduced the upfront mortgage insurance premium for eligible homeowners to 0.01 percent of the total loan and the annual premium to 0.55 percent of the loan. For borrowers who are not eligible for the reduced fees under the streamline program, the cost of upfront mortgage insurance is 1.75 percent of the total loan and 1.25 percent of the loan per year.
Loan officers and other mortgage professionals say they have lists of clients who are waiting to refinance in June with the lower fees.
"We could have a mini-refinance boom in June" after the fees are reduced, says Derek Egeberg, a branch manager at Academy Mortgage in Yuma, Ariz.
Are You Eligible?
To qualify for the reduced fees on streamline refinances, the borrower must:
Have a mortgage already insured by the FHA. Be current on the mortgage. Have a mortgage that was endorsed by the FHA before June 2009.
It's important to remember that just because you closed the loan before June, it doesn't mean the mortgage was FHA-endorsed by the cutoff deadline. There could have been a 60-day gap from the time your mortgage closed to the time your loan documents arrived at the FHA for endorsement.
No Appraisal Required, But Some Lenders Have Overlays
As long as your mortgage payments decrease by at least 5 percent with the refinance, the lender does not have to order an appraisal of your home. This helps homeowners who are upside down on their mortgages.
"But if you are going from a 30-year to a (15-year mortgage) and your payment is not decreasing, or if you are removing one person off the title," you'll need an appraisal, says Dan Green, a loan officer at Waterstone Mortgage in Cincinnati.