Tuesday, March 6, 2012

New FHA Mortgage Insurance Premiums

Just released... HUD Mortgagee Letter 12-4. The FHA Mortgage Insurance changes previously announced will now be effective on FHA case numbers assigned April 9, 2012 and not on the first. They aren't fooling around either, the upfront premium (UFMIP) on loans with a loan to value greater than 95% will be 1.75%.  This applies to purchase and refinance transactions. There are two phases to this adjustment depending on the loan amount for the annual (collected monthly) MIP. The second change will take place on FHA case numbers assigned on or after June 11, 2012 for loan amounts greater than $625,500. See chart below:


Term > 15 Years
Base Loan Amount - LTV - Effective - Annual MIP
Any Amount ≤ 95.00% - April 9, 2012 - 120 bps
Any Amount > 95.00% - April 9, 2012 - 125 bps
Term ≤ 15 Years with LTV above 78% 
Any Amount ≤ 90.00% - April 9, 2012 - 35 bps
Any Amount > 90.00% - April 9, 2012 - 60 bps

Term > 15 Years
Base Loan Amount - LTV - Effective - Annual MIP
≤ $625,500 ≤ 95.00% - June 11, 2012 - 120 bps
≤ $625,500 > 95.00% - June 11, 2012 - 125 bps
Above $625,500 ≤ 95.00% - June 11, 2012 - 145 bps
Above $625,500 > 95.00% - June 11, 2012 - 150 bps
Term ≤ 15 Years with LTV above 78% 
≤ $625,500 ≤ 90.00% - June 11, 2012 - 35 bps
≤ $625,500 > 90.00% - June 11, 2012 - 60 bps
Above $625,500 ≤ 90.00% - June 11, 2012 - 60 bps
Above $625,500 > 90.00% - June 11, 2012 - 85 bps

Good news for FHA Streamline Refinances though as of June 11, 2012 the mortgage insurance will actually decrease if your Current FHA loan was endorsed before May 31, 2009. The annual MIP will be calculated at .55% regardless of the new loan amount and the UFMIP will be only .01%. Yes 1 bp... Time to pull the trigger folks because at the rate they keep changing the fee structure who knows how long this will last!

This changes applies to forward mortgages only and not reverse mortgages. Please refer to the Mortgage letter linked above for more information.

To apply for this or any other loan program contact me today.