HUD announces increase in UFMIP effective April 5th

By
Mortgage and Lending with Veritas Funding, SLC, UT NMLS #231319

Most folks know that FHA requires an Upfront Mortgage Insurance Premium (UFMIP) in addition to the monthly mortgage insurance for a government loan.  On Thursday, January 21st, HUD announced an increase of this premium from the current 1.75% to 2.25% for FHA loans for which the case number is assigned on or after April 5th, 2010.  Read in full here http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-02ml.pdf  regarding this update.

WHAT THIS MEANS TO YOU!

Although the UFMIP is typically financed into an FHA loan (thus the borrower doesn't have to come up with the funds at closing), this increase is worth discussion.  Consider a first time home buyer purchasing a $250,000 home with a 3.5% down payment.  Their base loan amount is $241,250; total loan amount (including 1.75% UFMIP) is $245,471.  After April 4th, the total loan amount jumps up by $1,207 (reflecting the increase from 1.75% to 2.25% UFMIP) to $246,678.  In addition to the extra $1,207, their payment increases by $6.48 per month.  Use this information to help your clients get off the fence.  Ask them, "Why wait until spring if it costs you that much more?"   Please visit my website at www.utahloanplan.com for more info or call me directly at 801.983.8211 to discuss.

Best regards,

Joe Libin

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Comments (1)

Randy DeLaMare
Realtypath LLC - Salt Lake City, UT
Helping friends Realize their Real Estate Dreams

Joe, Great information. Just one more reason to jump in now to make sure to take advantage of the first time home buyer tax credit. Thanks for keeping us up to date.

Jan 26, 2010 07:19 AM