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FHA Rules to change around March 31st on Mortgage Insurance!

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Adalen
Frequent Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!

Waaaait a second, the new rules only apply for less than 10% down?


Message 41 of 49
tooleman694
Valued Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!

Apply if you have PMI I believe.

Message 42 of 49
Mike_B03
Valued Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!


@Adalen wrote:

Waaaait a second, the new rules only apply for less than 10% down?


If you put down 10% or more, then the PMI can fall off after 11 years. Everyone, no matter how much you put down, will have to pay PMI, the only difference if it the PMI will ever fall off or not. 

Message 43 of 49
tooleman694
Valued Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!

I would have been screwed, we are putting down 9 percent.

Message 44 of 49
Adalen
Frequent Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!

Just wondering, since we will likely have 10% (haven't found a house yet) but only if seller pays closing.  Might as well wait and save the other 10% if we miss the date. Whenever that may be. 


Message 45 of 49
cclee
Regular Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!

If you are going fha, the other 10% won't matter, the monthly MIP is still required for 11yrs, right now if you do a 15yr with a 78% ltv you don't pay the monthly MIP, but still pay the upfront fee.




In The Garden Until 11/01/15 - Last App 11/03/13
Message 46 of 49
JM-AM
Valued Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!


Just need to comment on this...

 

"This statement making the comment its still 11 years"

 

Have you actually figured out how long it takes you on an FHA loan now?

 

You buy a home at 250K, you put 10% down, so you are borrowing 225K on your mortgage (Take note I didnt add any upfront MIP or rolled over closing cost), and you get a rate of 3.5% for 30 years fixed.

 

If you started making payments today, it would take you just short of 10 years before you reached the 78%LTV.

 

Now you can pay additional towards the principle, to help lower this time frame, but while many say they will, only about less then 1% actually do it.

 

Even as of now you must pay it for 5 years minimum. So you would need to add $404 to each payment to be at 78% LTV in 5 years.

 

Making the assumption that FHA is raising it to a minimum of 11 years, changes very little for most purchases.

Good Luck
May all your dreams and wishes become a reality!
Message 47 of 49
cclee
Regular Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!

That is true JM, I was under the impression they were thinking if they put 20% down that they wouldn't be paying the monthly MIP, I may have read that wrong.




In The Garden Until 11/01/15 - Last App 11/03/13
Message 48 of 49
MovingForward_2012
Valued Contributor

Re: FHA Rules to change around March 31st on Mortgage Insurance!

It is still nice when those 11 years are up, to have no more mortgage insurance for the remaining 19 years. I do not plan to sell this home. It will be my retirement home, God willing. Now, the good news is the mortgage insurance is a % of the remaining principal. Granted after June 1st, that will be raised from 1.25% to 1.35%, but after 11 years, the mortgage insurance payment will be a tad bit cheaper than in the beginning, and it will continue to reduce for the life of the loan.
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Message 49 of 49
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