Reply
New Member
northoc714
Posts: 3
Registered: ‎12-02-2012
0

FHA PMI For LIFE OF LOAN 2013???

[ Edited ]

I just heard FHA might make it mandatory to keep Mortgage Insurance included for the LIFE OF THE LOAN?  Is this seriously going to pass???

 

As of now, FHA Mortgage Insurance can be taken off after 5 years or reaching 22 percent of equity?

 

My family is close to purchasing our first home and this is a REAL BUMMER!!!  

 

 

New Member
northoc714
Posts: 3
Registered: ‎12-02-2012
0

Re: FHA PMI For LIFE OF LOAN 2013???

Established Member
maria_c
Posts: 15
Registered: ‎12-02-2012
0

Re: FHA PMI For LIFE OF LOAN 2013???

From reading HUD's policy changes, this is how I interpret it as well.  This is a real bummer for me too since I was trying to finance a home loan this year but ran into a pretty big snag (unknown foreclosure showing on CR) that forces me to wait until 2013 to get a loan.  

Start FICO TU: 627 (7/23/2012)
Current FICO TU: 679 (01/01/13)
FICO Goal: 750
App Free Since: 12/10/2012
Member
JohnL1900
Posts: 37
Registered: ‎12-02-2012
0

Re: FHA PMI For LIFE OF LOAN 2013???

There is always the option to refinance and go conventional right? I'm right in the middle of this as well with a new construction loan that wouldn't be losing until mid 2013 but I could possibly refinance a year later (or sooner? What's the minimum time before you can refinance?)


Starting Score: Equifax: 529
Current Score: Equifax: 672
Goal Score: 720


Take the FICO Fitness Challenge
New Member
northoc714
Posts: 3
Registered: ‎12-02-2012
0

Re: FHA PMI For LIFE OF LOAN 2013???

[ Edited ]

This sucks if it passes.  The loan I'm looking at is $275 a month for MI.  I figured since the rates are so low at 3.25 that I would keep this rate for the remainder of the loan and the MI would drop off in about 5 years.  

 

You have the option to refinance after 5 years but who knows what the rates will be in 5 years?  What were the rates in 07?  How was the market then?  Things change drastically.

 

If we got to keep the MI for the entire loan, AT LEAST drop the price of the payment after the first 5 years!  Make it similar to the price of hazard insurance! What a RIP OFF! 

Member
JohnL1900
Posts: 37
Registered: ‎12-02-2012
0

Re: FHA PMI For LIFE OF LOAN 2013???

What do you mean you have the option to refinance after 5 years?

 

I've been searching on Google and from what I've found, you can refinance an FHA loan at any time. Only time restriction I've found is that some lender will not refinance a loan if it's newer than 6-12 months.


Starting Score: Equifax: 529
Current Score: Equifax: 672
Goal Score: 720


Take the FICO Fitness Challenge
Valued Member
tshope4205
Posts: 39
Registered: ‎11-09-2012
0

Re: FHA PMI For LIFE OF LOAN 2013???

Looks like that wouldn't o into effect until late 2013.


Starting Score: 534 (10.30.12)
Current Score: 649 (12.9.12)
Goal Score: 700


Take the FICO Fitness Challenge
Moderator Emeritus
webhopper
Posts: 7,225
Registered: ‎09-16-2011
0

Re: FHA PMI For LIFE OF LOAN 2013???

[ Edited ]

According to those findings, the capital reserve ratio

of the MMI Fund, which contains FHA’s single family mortgage insurance programs, has fallen

below zero, to

negative 1.44 percent.

 

 

This is scary!  

 

That being said, if changing the FHA MI program to where future borrowers pay MI for the life of the loan or until they refi to conventional keeps me the taxpayer from having to bail out FHA, then I'm totally FOR this legislation.

 

I think this would push more of the borrowers to refi away from FHA once they've acheived the appropriate amount of equity, and it would relieve some financial obligations from FHA and allow FHA to insure more mortgages in the future.

 

Looks like they just need to do something to stabalize FHA and keep it sustainable for borrowers to be able to rely on the program in the future.  I want my kids to have this program available, so I'm for doing whatever it takes to even out the ratios of committments vs reserves.


Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
Wallet: NFCU Visa Sig 25k, Amex Lowes 22k, NavCheck 15k, Amex PRG, Amex Zync, Discover It 13.5k, Amazon Visa 5k
Platinum Spade Garden Club Member: App Free since 1/1/13. No more apps til who knows when?
MyFICO Fitness Goal: 800s Club!



Take the myFICO Fitness Challenge
Frequent Contributor
seigex
Posts: 425
Registered: ‎05-16-2012
0

Re: FHA PMI For LIFE OF LOAN 2013???


webhopper wrote:

According to those findings, the capital reserve ratio

of the MMI Fund, which contains FHA’s single family mortgage insurance programs, has fallen

below zero, to

negative 1.44 percent.

 

 

This is scary!  

 

That being said, if changing the FHA MI program to where future borrowers pay MI for the life of the loan or until they refi to conventional keeps me the taxpayer from having to bail out FHA, then I'm totally FOR this legislation.

 

I think this would push more of the borrowers to refi away from FHA once they've acheived the appropriate amount of equity, and it would relieve some financial obligations from FHA and allow FHA to insure more mortgages in the future.

 

Looks like they just need to do something to stabalize FHA and keep it sustainable for borrowers to be able to rely on the program in the future.  I want my kids to have this program available, so I'm for doing whatever it takes to even out the ratios of committments vs reserves.


agreed... keep in mind this is the only federal program that is completely 100% self sustainable, funded only by mortgage insurance... and the rates in 2007 stayed pretty much the same when house prices went up in the housing bubble of 2000's so when all the foreclosures happen after the sub prime bust, FHA took a major hit on insured mortgages, so they are looking for ways to remain solvent without relying on taxpayer dollars to fund it.

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

NFCU VISA $17.5k / USAA AMEX $6k / USAA AMEX $4k / USAA VISA $4k / CHASE FREEDOM $3k / Capital One $500
Valued Member
tshope4205
Posts: 39
Registered: ‎11-09-2012
0

Re: FHA PMI For LIFE OF LOAN 2013???

Again, you wouldn't be affected by these changes - unless you don't close on an FHA loan until later next year.  But yes, I would be extremely hesitant & would probably delay a potential sale until I could qualify for conventional if this was in place today.  It's a SUBSTANTIAL difference.  Thankfully, as it stands today, I believe you pay for the longer of 5 years or until 78% LTV (of original sale amount).  That would still be effective for loans closed prior to these changes being implemented later next year.

 

Excerpt from report:

 

"Therefore, beginning with new loans endorsed after the policy change
becomes effective later in FY 2013, FHA will once again collect premiums on FHA loans
for the entire period during which they are insured, permitting FHA to retain significant
revenue that is currently being forfeited prematurely."


Starting Score: 534 (10.30.12)
Current Score: 649 (12.9.12)
Goal Score: 700


Take the FICO Fitness Challenge

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}