Quick reminder regarding the new FHA UFMIP

By
Mortgage and Lending with Alterra Home Loans

Just wanted to remind everyone to pull your FHA case numbers before April 5th in order to receive the current up-front mortgage insurance premium of 1.75%.  The rate increases to 2.25% for case numbers pulled on or after April 5th - that's next Monday.

Update: With business closed and Monday being April 5th, loan officers now need to remember to use the new rate of 2.25% when calculating up-front mortgage insurance for an FHA loan.  

In other FHA news, more changes regarding seller contributions to closing costs will occur in the summer - it will be going from 6% to 3% and unfortunately is said to include the seller's side of title insurance and possibly even the transfer tax. 

Posted by

D. Jed Wunderli

Certified Mortgage Planner

Alterra Home Loans

702-812-1214

Comments (3)

Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Jed,

So that's another .50 paid up front after 4/5 case numbers correct?

Mar 29, 2010 12:38 PM
Damon Gettier
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE

If we want something done wrong just let the government work on it. Too bad they had to mess with this.

Mar 29, 2010 12:56 PM
Jed Wunderli
Alterra Home Loans - Las Vegas, NV

Lynda - that is correct.  On a $200,000 base loan amount, the up-front mortgage insurance just went up from $3,500 to $4,500.  The difference in payment for that extra $1,000 is $5.68 at a 5.5% rate.  At 6% the payment difference is $5.99.  It's better that the government changed this than the annual mortgage insurance (which the borrower pays monthly) because that would have had a much bigger negative impact on debt ratios and would have meant a lot fewer people qualifying for FHA loans.  On average, the difference in the upfront mortgage insurance premium will cost a borrower about $5 - $9 per month.

 

As for Damon's comment, I agree about the government screwing up a lot of things, the new GFE comes to mind - it's an absolute nightmare.  The deal is that the FHA insurance fund is far below the statutory limit and needs to be increased.  Doing it this way is much better than raising the annual portion of the mortgage insurance - which I hear they are still considering.  Note to lawmakers - this would be very bad for a recovery since going from a factor of .55 to .85 would eliminate a lot of would be buyers and make it harder for those who do qualify to make their monthly payments.

Mar 30, 2010 02:37 AM