Refinancing Costs for FHA Loans
ByToday when you refinance mortgage loans above 80% loan to value it requires the borrower to pay additional mortgage insurance. Whether the borrower is refinancing conventional or FHA loans, mortgage insurance will be required. Monthly mortgage insurance has risen over the last few years due to the increase in loan defaults. FHA Loan Pros recommends making sure you have included PMI into the loan payments when comparing mortgage refinance offers from conventional and FHA lenders. In addition, homeowners that refinance FHA must pay an additional 2.25% of the FHA loan amount up-front to cover the mortgage insurance premium. FHA is trying to get Congress to pass a bill to increase for the annual mortgage insurance premium rate. It is important that borrowers consider all of the costs when considering the benefits of home refinancing.
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