FHA Raising Mortgage Insurance Premiums April 1, 2012

Reblogger Dagny Eason
Real Estate Broker/Owner with Dagny's Real Estate

This is really timely info, Kevin - thanks for writing this up for us - I am hoping to share this with all of my followers!

Thanks so much!

Original content by Kevin Whatley NMLS License #113781

The FHA is once again raising mortgage insurance premiums (MIP) on its newly-insured borrowers.  It's the FHA’s fourth such increase in the last two years.

Beginning April 1, 2012, upfront mortgage insurance premiums will be higher by 75 basis points, or 0.75%; and annual mortgage insurance premiums will be higher by 10 basis points per year, or 0.10%.

For borrowers with a loan size of $200,000, the new MIP will add $1,500 in one-time loan costs, plus an on-going, annual $200 increase in total mortgage insurance premiums paid.

All new FHA loans are subject to the increase — purchases and refinances.

The FHA is increasing its mortgage insurance premiums because, as an entity, the FHA is insuring a much larger percentage of the U.S. mortgage market than ever before. 

In 2006, the FHA insured 2 percent of all purchase-money mortgages. In 2011, that figure jumped to 18 percent. Unfortunately, as the FHA has insured more loans, it’s number of loans in default have climbed, too, forcing the FHA to boost its reserves.

Beginning April 1, 2012, the new FHA annual mortgage insurance premium schedule is as follows :

  • 15-year loan term, loan-to-value > 90% : 0.60% MIP per year
  • 15-year loan term, loan-to-value <= 90% : 0.35% MIP per year
  • 30-year loan term, loan-to-value > 95% : 1.25% MIP per year
  • 30-year loan term, loan-to-value <= 95% : 1.20% MIP per year

In order to calculate what your FHA annual mortgage insurance premium would be on a monthly basis, multiply your beginning loan size by your insurance premium in the chart above, then divide by 12.

In addition, for loans over $625,500, beginning June 1, 2012, there is an additional 25 basis point increase to annual MIP.

To avoid paying the new FHA mortgage insurance premiums, start your FHA mortgage application today. Existing FHA-insured homeowners will not be affected by the change.

Mortgage insurance premiums will not rise for loans already made.

Kevin Whatley

NMLS License #113781

Mortgage Banker

Universal Home Mortgage

Company NMLS #2289

Shreveport, Louisiana

877-786-5578

http://www.universalhomemtg.com/ 

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Rainmaker
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Randy Mitchelson,APR
Marketing Coach & Homeland Heroes Home Loans - Bonita Springs, FL
First Impressions are made at First Click

I guess when your bankrupt all you can do is try to get away with charging more. Eventually, the pricing may get to the point where Wall St. feel like it can compete again and private subprime will bounce back. Up to now, FHA has been THE subprime market.

Mar 19, 2013 02:04 AM #1
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