FHA Rates Increasing Monday, April 9th

Looking at getting an FHA-backed loan? Now is the time to get your application in gear.

Beginning next week, the Federal Housing Administration (FHA) is changing the way it charges mortgage insurance to U.S. homeowners.  For the fourth time since 2010, FHA mortgage insurance premiums are rising for all FHA-backed homeowners.

For FHA Case Numbers assigned on, or after Monday, April 9th, 2012, there are two planned changes.

  1. FHA Upfront Mortgage Insurance Premiums (UFMIP) will increase by 75 basis points to 1.75%, or $1,750 per $100,000 borrowed. Upfront Mortgage Insurance Premium is paid at closing, and typically added to an FHA borrower’s loan.

(Currently, the UFMIP rate is 1.000 percent.)

  1. Annual FHA mortgage insurance premiums are rising. All new FHA-backed loans will be subject to a 10 basis point increase in annual mortgage insurance premiums, costing homeowners an extra $100 per $100,000 borrowed a year.

The new FHA annual mortgage insurance premium schedule 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
  • 15-year loan term, loan-to-value <= 78% : 0.00% 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 addition, for loans above $625,500, beginning with FHA Case Numbers assigned on, or after, June 11, 2012, there will be an additional 25 basis point increase in annual MIP.

To calculate your monthly MIP obligation, multiply your loan amount by your insurance rate from the list above, then divide by 12.

Note that the FHA mortgage insurance changes apply to new FHA Case Numbers only. If you have an FHA mortgage approval in-process, or an existing FHA home loan, you are not subject to the new MIP schedule. To avoid paying the FHA’s new rates, you need to contact a mortgage banker today and start your application!

Once your FHA Case Number is assigned, you’re locked into today’s lower premiums.

As always, if you have any questions, please contact your trusted Bell Mortgage loan officer.

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