This is the biggest change in sight right now and basically will mean higher payments for your FHA buyers. This might make those strong credit buyers strive to put down the extra $$ to qualify for a Conventional loan or to look at properties that would be eligible for USDA financing.
Annual MIP Increases - February 15, 2011
With Mortgagee Letter 11-10, FHA announces an increase to the Annual Mortgage Insurance Premium on standard FHA loan programs and a change that affects case numbers.
Here are the 7 things you need to know about these changes:
1. These changes are effective April 18th, 2011.
2. The Annual Insurance Premium will increase .25% for standard forward mortgages. The Upfront Mortgage Insurance remains at 1.00%.
3. The Annual Premium is now 1.15% for LTVs GREATER than 95% on 30 year loans.
4. The Annual Premium is now 1.10% for LTVs EQUAL to or LESS than 95% on 30 year loans.
5. The Annual Premium is now .50% for LTVs GREATER than 90% on 15 year loans.
6. The Annual Premium is now .25% for LTVs EQUAL to or LESS than 90% on 15 year loans.
7. Case numbers with no activity for 6 months will automatically be canceled (includes case numbers pulled prior to April 18th, 2011).
Here is an example of what that means to the borrower:
$200,000 Purchase Price with 3.5% Down.
Old (.9): $146.20 monthly MI
New (1.15): $186.81 monthly MI
That's only $40.61 more per month, $487.32 per year I'm sure most buyers won't object. NOT!
So that's that. I hope you find this useful.
For more info contact:
Phillip Jones, Broker
Your Choice Real Estate, Inc.
151-18 College Drive
Orange Park, FL 32065
Phone: (904) 298-2679 Ext 501
Toll Free: (888) 490-0671 Ext 501
Fax: (866) 923-9990
E-Mail: email me for more info