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For Orange County FHA borrowers with rates at 5.5% or higher, now is the time to investigate whether you qualify for an FHA Streamline Refinance. The combination of low rates, easy Streamline Refinance guidelines, and uncertainty with what changes to the FHA program may be right around the corner, now is the time learn about this program.

FHA Mortgage Rates at all Time Low’s

Mortgage rates in Orange County are at or near all time low’s. Only a year ago FHA interest rates were in the 5.5% to 6% range. Expectations earlier this year were for an increase in rates, but that thinking has reversed. With financial pressures throughout the world’s economies and inflation in check, mortgage rates have actually dropped.

Why the Urgency?

Congress recently passed HR 5072, a bill that will allow FHA to increase the Monthly Mortgage Insurance from .55% (over 95% LTV) to 1.55%. The Senate still needs to pass the bill before it can be signed into law, but if, or when this happens, the benefit of a FHA Streamline Refinance will go away for most FHA borrowers. There has been talk that FHA would most likely not increase the Monthly Mortgage Insurance to 1.55%, but would probably increase it to approximately .9%. On a $300,000 loan, the mortgage insurance at .55% is $137. At .9% it would be $225. That is an $88 payment increase.

Requirements for FHA Streamline Refinance

There are several requirements that need to be met in order to qualify for an FHA Streamline.

• Must currently have an FHA loan. This program is only for FHA to FHA refinances.
• Must be current on your mortgage. FHA will not allow the refinance of a past due FHA mortgage.
• The new payment must be at least 5% less than the current payment. The total principle, interest, taxes, insurance, and mortgage insurance are used in this calculation. This is also why an increase in the monthly mortgage insurance would make it difficult to get the needed payment drop for a refinance to make sense.

Many Orange County FHA home loan borrowers have already out how easy this program is. No appraisal, no income qualifying, and in most cases, no closing costs, make the FHA Streamline refinance one of the best mortgage deals going.

The first step is to find a local Orange County FHA home loan expert who can prepare scenarios based on your current FHA loan interest rate and payment figures. He should be able to let know if you qualify and whether or not it even makes sense based on your individual situation. As good as it sounds, it still is not for everybody. But with rates so low, it’s definitely worth checking out.