FHA has increased their upfront and annual mortgage insurance premiums again. It is getting very expensive for an FHA loan. If you can qualify for a conventional loan, the costs are much better. There is no upfront MI and much lower annual (paid monthly in mortgage payment) MI.
Changes will be effective on April 9, 2012.
The charts below illustrate the 10 basis points (bps) increase in the Annual Mortgage Insurance Premiums (loan amounts under $625,000) and a 75 basis points (bps) increase to the Upfront Mortgage Insurance Premium (UFMIP). It is anticipated that these marginal increases are affordable for nearly all homebuyers who would qualify for a new mortgage loan and will significantly strengthen the capital position of the MMIF.
Upfront Premiums:
Upfront premiums (UFMIP) will increase by 0.75 percent.
- Purchase Money Mortgages and Full-Credit Qualifying Refinances = 1.75 percent
- Streamline Refinances (all types) = 1.75 percent
Annual Premiums:
FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above $625,000.
For FHA traditional purchase and refinance products, the annual premium, shown in percentage below, is to be remitted on a monthly basis, and will be charged based on the initial loan-to-value ratio and length of the mortgage according to the following schedule for loan amounts under $625,000: For loan amounts larger than $625,000, view the full mortgagee letter below.
| LTV Ratio | Annual Premium for over 15 Years and up to 30 Years | LTV Ratio | Annual Premium for Loans 15 Years and Under |
| 95.00% and Under | 1.20% | 78% and under | 0.00% |
| 95.01% and Over | 1.25% | 90.00% to 78.01% | 0.35% |
| 90.01% and Over | 0.60% |
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