02-22-2013 06:18 PM
Over the past few days I've read a lot of different threads that have partial correct & incorrect information on the upcoming FHA mortgage insurance changes. I wanted to start a thread to clarify with complete correct information what is going to happen in the next few months.
First, for those who want to read the official rules from HUD (who oversees/administers FHA loans) you can find it at http://portal.hud.gov/huddoc/13-04ml.pdf
These guidelines are effective for new FHA case #'s pulled on & after the below dates. To get an FHA case # you need to have completed a full application, and in the event you are purchasing a home, you also need to have an accepted contract (short sale contacts, where you are still waiting for the sellers lender to respond, are also fine). This does not impact conventional loans, VA loans, or USDA loans... only FHA loans.
What is changing on 4/1/13:
The annual mortgage insurance premium (abbreviated as annual MIP) is increasing by .1% of the loan amount per year. That means on a $100k loan amount it increases by $100/year, or $8.33/mo.
Below is a chart of the new MIP rates depending on the loan amount & the loan-to-value your loan starts off at. 130bps = 1.3% per year.
What is changing on 6/3/13:
The amount of time that the annual MIP is required to be paid is increasing. It'll either be 11 years or for the life of the loan, depending on the loan term & amount of down payment (or amount of equity if a refinance). See the chart below.
Another change is that currently if you take a 15-year fixed (or shorter) and are putting down 22% (or have 22% equity on a refinance) then there is no annual MIP... but on 6/3/13 there will be in the amount of .45% per year (on a $100k mortgage that would be $450/year, or $37.50/mo), see below.
The upfront mortgage insurance premium (UFMIP) is still remaining at 1.75% of the base loan amount, and can still choose to be financed into the loan amount or paid out of pocket. For example a $100k base loan amount would have a $1,750 UFMIP, and if financed, would have a total loan amount of $101,750. The annual MIP is calculated on the base loan amount, not total loan amount.
02-22-2013 06:38 PM
02-22-2013 06:42 PM
The UFMIP is a 1 time charge when you initially get the loan, it's never charged again.
The annual MIP is charged every month until it falls off (per the tables above).
The first two lines of the first table are for LTV's ≤ 95% (line 1), and LTV's > 95% (line 2).
02-22-2013 06:46 PM
02-22-2013 06:48 PM
02-22-2013 06:50 PM
with these low rates.... we should be writing more 15yr loans...... but so many people are just buying bigger house.
gonna miss the old 'no mi on 15yr' deals.......
02-22-2013 06:51 PM
gonna miss the old 'no mi on 15yr' deals.......
Me too, was real helpful for people who had foreclosures within 7 years and great equity positions... Fannie/Freddie was out, but FHA had lower rates + no annual MIP.
03-25-2013 11:53 AM
You need an FHA Case # prior to April 1st to be subject to all FHA guidelines as they stand today. After 4/1, as it says, the rate goes up, and in early June, you'll need to pay the mortgage insurance for the life of your loan.
From what I've heard, you get an FHA case # when you apply for a loan and you're under contract on a specific property.
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