FHA Increases Upfront Mortgage Insurance Premiums

For those of you interested in purchasing a home in the near future with an FHA loan, you should be aware that FHA has made another change.  Here are the details:

• Effective with case numbers assigned on or after April 5, 2010, FHA has increased the Upfront Mortgage Insurace Premiums (“UFMIP”) for most FHA programs to 2.25%
• Purchase money and full credit qualifying refinance transactions have increased from 1.75% to 2.25%.
• Streamline refinances, with or without an appraisal, have increased from 1.50% to 2.25%

There are no changes to the annual Mortgage Insurance Premium (“MIP”) at this time.  The annual premiums, which are remitted on a monthly basis, are a factor of the loan term and loan-to-value ratio.  For now, these factors continue to be:

                                            Term > 15 Years          Term < 15 Years

Loan to Value  > 95%               0.55%                               0.25%

Loan to Value  < 95%               0.50%                               None

What this means to you as a potential home-buyer is that all loans initiated on or after April 5, 2010 will incur a .5% increase in Mortgage Insurance Premiums.  For example, on a $100,000 loan this will be an increase of $500 for the premium at closing.  Be sure to keep this in mind if you’re thinking of purchasing in the near future.

This information provided by Shane Siniard with WR Starkey Mortgage 125 Town Park Dr. NW, Ste. 200 Kennesaw, GA 30144

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