FHA Mortgage Insurance Premiums Update

The new FHA MORTGAGE INSURANCE PREMIUMS go into effect for CASE NUMBERS assigned on or after 10/4/10

NOW is the time to contact your potential FHA buyers & clients (especially those possible FHA streamline refinances) and get word out. If they want a choice of options, they need to get a purchase contract and/or a loan application in NOW. The new MIP has merits in that it will be a lesser loan amount financed and therefore less loan to pay off when people sell their house. However, it causes a HIGHER PITI payment that may not be appealing to people.

Current upfront mortgage insurance premium - 2.25 bps ~ On or after 10/4/2010 - 1.00 bps ~ LOWER!

Current monthly MIP - .55 bps ~ On or after 10/4/10 - .90 on LTV's > 95% ~ HIGHER!

Take a look at the attached analysis here: FHA_Premium_Changes_Analysis[1] to see the significant difference this change will make on a $150,000 purchase price. You will notice the lower UMIP will mean an $1800 lower loan amount. But, the much higher monthly MIP would increase the monthly payment $32! This is going to have an impact on borrowers and their financing options. Call or email me with questions! We are closing FHA loans in 30 days!

Courtesy of Kathy Lamb, Union Saving Bank

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