MIP is the Mortgage Insurance Premium (similar to PMI on conventional mortgages with a loan-to-value over 80%). For FHA loans the MIP will be paid regardless of loan-to-value.
As of October 4th 2010 all new FHA loans will have lower upfront and a higher annual MIP charge. The upfront MIP will be reduces to 1.00% or the mortgage amount and the annual MIP payment will be increased to 0.85% paid monthly (for purchases and refinances).
In the example I saw: for a $100,000 loan the upfront will be lowered by about $1,250 and the monthly will increase by about $30.
FHA believes this will improve their monthly cash flow by $300 million.
Contact your lender to see the impact on you. For those of you in Cobb County GA - just contact me and I will put you in touch with one of my favorite lenders.
678-772-7411
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