Alpharetta Cumming Lake Lanier Real Estate Blog

FHA: Monthly Mortgage Insurance Premiums To Rise April 18th, 2011
For the third time in 12 months, the FHA is changing its mortgage insurance costs.

Effective for all FHA case numbers assigned on, or after, April 18, 2011, annual mortgage insurance premiums (MIP) will increase 25 basis points.

The change will add $250 to an FHA-insured homeowner's annual loan costs per $100,000 borrowed, and applies to all borrower's equally. Current FHA borrowers are unaffected.

To understand the FHA is to understand why premiums are rising.

As an institution, the Federal Housing Administration plays a much larger role in the U.S. housing market today than it did just 5 years ago. According to its own records, the FHA's percentage of purchase money business nationwide expanded from 4 percent in FY 2006 to 19 percent in FY 2010.

Rapid growth like this has strained the FHA's capital and, indeed, in its official statement, the FHA alludes to this, stating that the MIP increase will "significantly strengthen" its reserves. By law, the FHA must maintain a certain minimum level of reserves.

FHA mortgage insurance varies by loan term, and by loan-to-value and, beginning April 18, 2011, the new insurance premiums are as follows:
• 15-year loan term, loan-to-value > 90% : 0.50% per year
• 15-year loan term, loan-to-value <= 90% : 0.25% per year
• 30-year loan term, loan-to-value > 95% : 1.15% per year
• 30-year loan term, loan-to-value <= 95% : 1.10% per year
To calculate your monthly mortgage insurance premium, multiply your starting loan size by your insurance premium, and divide by 12. There is no change planned to the 1 percent upfront mortgage insurance premium charged by the FHA.

Please call us if you have any questions.

Labels: cumming homes for sale, FHA, FHA mortgage insurance

For the second time this year, the FHA is modifying mortgage insurance. Beginning with FHA case numbers issued on or after October 4, 2010, the FHA is changing its upfront and annual mortgage insurance premium structure.
Under the new terms, assuming a 30-year fixed rate FHA mortgage with at least 5 percent equity:

• Upfront MIP drops to 1.000% of the amount borrowed from 2.250%
• Annual MIP increases to 0.850% of the amount borrowed from 0.500%


What Does This Mean For Homeowners?

This switch in MIP decreases the upfront cost of an FHA-insured mortgage, but increases the loan's long-term costs.

Using a $100,000 mortgage as an example, upfront MIP falls to $1,000 from $2,250; monthly MIP jumps to $70.83 from $41.67. The FHA expects the change will yield an additional $300 million in premiums monthly. The update is a huge win for the FHA whose reserve funds are self-proclaimed to be "perilously low". The extra monies should help recapitalize and stabilize the government group. The FHA is on pace to back 1.7 million loans this year.

For the majority of refinancing FHA homeowners and home buyers, the MIP change is neither good nor bad - the borrowing landscape will just looks a bit different. Yes, loans will cost more to carry each month, but also they'll be less expensive to procure. It's a trade-off and you can apply math formulas to solve for the best time to apply FHA.

If you're unsure of how the new FHA mortgage premiums will impact your mortgage, be sure to call or email your loan officer for help.
PLEASE NOTE : The FHA originally announced an implementation date of September 7.

It was subsequently amended to October 4, 2010.

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Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, home loans, rates, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, home loans, interest rates, mortgage rates, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, home loans, interest rates, mortgage rates, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest, mortgage, rates, real estate, vanderhoff

NEW YORK (CNNMoney.com)January 20, 2010: 3:53 PM ET -- It's going to be harder to get a government-backed mortgage from now on.

Looking to shore up its weakening finances, the Federal Housing Administration is set to announce stricter standards on Wednesday.
The agency, which insured nearly a third of new mortgages in 2009, will increase the premium it charges for its mortgage insurance and require those with weaker credit scores to come up with larger downpayments.

The FHA will also reduce the amount of money a seller can provide a homebuyer for closing costs, as well as tighten its enforcement of lenders.

"Striking the right balance between managing the FHA's risk, continuing to provide access to underserved communities, and supporting the nation's economic recovery is critically important," FHA Commissioner David Stevens said in a statement. "Importantly, FHA will remain the largest source of home purchase financing for underserved communities."

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Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest, mortgage, rates, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest, mortgage, rate, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest, mortgage, rate, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest, mortgage, rates, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest, mortgage, rate, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest rates, mortgage rates, rates, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest rates, mortgage rates, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, home loans, interest rates, mortgage rates, rates, real estate, vanderhoff

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Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, loans, rates, real estate, vanderhoff

Labels: 15 year fixed, 30 year fixed, covenant mortgage, FHA, interest, mortgage, rates, real estate, vanderhoff