Admin

FHA Announces Monthly Mortgage Insurance (MIP) Increase

By
Real Estate Agent with Real Estate Worcester County MA 9052279

COURTESY OF SEAN FLEMMING PHH MORTGAGE FAMILY

*Good news is that the minimum down payment remains at 3.5% and maximum seller's concession remains at 6%.

 

The Federal Housing Administration (FHA) has announced a new premium structure for FHA-insured mortgage loans that increases its annual mortgage insurance premium (MIP) by a quarter of a percentage point on all 15- and 30-year loans. The up-front MIP will remain unchanged at 1% and will impact new loans insured by the FHA on or after April 18.

 

According to the FHA, this premium change enables the agency to increase revenues to preserve the stability of its Mutual Mortgage Insurance fund, which had capital reserves of approximately $3.6 billion at the end of fiscal year 2010. The change is estimated to contribute nearly $3 billion annually to the fund, based on current volume projections.

Furthermore, the FHA estimates that on average, new borrowers will pay approximately $30 more per month.

 

"After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster the FHA's capital reserves and help private capital return to the housing market," says FHA Commissioner David H. Stevens. "This quarter point increase in the annual MIP is a responsible step towards meeting the congressionally mandated two percent reserve threshold, while allowing FHA to remain the most cost-effective mortgage insurance option for borrowers with lower incomes and lower down payments."

 

-Feb 15, 2011 (www.mortgageorb.com)

Sean Fleming, Mortgage Advisor
Direct: 401.714.5903   • Fax: 856.917.1397

NMLS #151080

sean.fleming@mortgagefamily.com

 

 

 

 

 

Michele Miller ~ REALTORĀ®, LMC, HSE, CHS, SRES, CMRS
ERA Key Realty~Worcester County Realty Group - Worcester, MA
'Helping You Make the Best Move"

AnnMarie,

Thank you for the information!

Hope you have a great day!

Feb 21, 2011 11:32 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Ann Marie, Thank you for the information. I hope the increase in annual mip will not hurt the market too much.

Apr 04, 2011 12:00 AM