Thursday, March 8, 2012
URGENT NEWS! FHA Announces Mortgage Insurance Premium Increase!
The Department of Housing and Urban Development and the FHA have announced a plan to increase FHA Mortgage Insurance Premiums.
In a press release, HUD No. 12-037, it was announced, “As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans.”
“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 that amount. Upfront premiums (UFMIP) will also increase by 0.75 percent.”
Some of these changes take effect for loans in April 2012, while others take effect in June of 2012. The FHA plans to issue a mortgagee letter fully explaining the changes and how they affect new home loans on and after those dates.
As stated previously, the FHA Up Front Mortgage Insurance Premium is affected as well–increased from the current rate of one percent to 1.75 percent of the base loan amount.
According to FHA.gov, “This increase applies regardless of the amortization term or LTV ratio. FHA will continue to permit financing of this charge into the mortgage. This change is effective for case numbers assigned on or after April 1, 2012,” adding, “Borrowers already in an FHA-insured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.”
How does this affect you? Well, as long as you have locked in the FHA case number prior to April 1st, then you will be allowed to utilize today's pricing. However, if you fail to lock before April 1st, you will be stuck with the increased MIP payments.
For more information call me, 469.774.2703 or visit the FHA official site.