FHA to reduce mortgage insurance premiums by 25 bps!

[Anonymous]

My question, will this affect the upfront MIP? You know, the ridiculous 1.75% that you have to pay upfront.

[ShanetheMortgageMan]

---

@Anonymous wrote:
My question, will this affect the upfront MIP? You know, the ridiculous 1.75% that you have to pay upfront.

---

Nope, hopefully someday though.  It's been at 1.750% for nearly 5 years now (4/9/12).

[Anonymous]

I was told today that we could extend our lock for a week (cost is 1/8th of a point) for $650.  This is a no brainer since I will recoup those costs in 7months with the lower MIP.  If we keep our FHA loan for at least the 11yrs (MIP drops after 11yrs if your downpayment is >20%) this reduction will save us approx $15k!!  Very happy about that!!

[StartingOver10]

---

@Anonymous wrote:

I was told today that we could extend our lock for a week (cost is 1/8th of a point) for $650.  This is a no brainer since I will recoup those costs in 7months with the lower MIP.  If we keep our FHA loan for at least the 11yrs (MIP drops after 11yrs if your downpayment is >20%) this reduction will save us approx $15k!!  Very happy about that!!

---

Yea!  Great decision.  One small correction - annual MIP drops off after 11 years if your downpayment is >10%.  

What a fantastic savings by waiting one week!  I would do that trade every day ($650 for $15,000) Congrats! Great timing for you.

[ShanetheMortgageMan]

Just a heads up on the mortgage insurance premium cut.  While it's not official, there have been a couple articles that came out today that say, per a mortgage industry lobbyist, our new president will issue an executive order freezing a number of actions by the current administration, including the FHA premium reduction.  The lobbyist said that the freeze could be announced anytime from this Friday through next Tuesday.  My guess is that if it is put on hold, that hopefully the new head of HUD (Carson) will just want to review FHA's insurance fund to make sure it'd be OK to implement... as there is a law that says FHA's insurance reserves have to maintain a certain level.  Please, no political comments regarding this (I already see enough of those on my Facebook feed).

[Client9]

What will be interesting to see is how the private MI companies responde rate wise to this change.  Essent, Genworth, MGIC, etc are going to have to come out with some lower MI.

[ShanetheMortgageMan]

---

@Client9 wrote:

What will be interesting to see is how the private MI companies responde rate wise to this change.  Essent, Genworth, MGIC, etc are going to have to come out with some lower MI.

---

PMI companies revise their rates a lot more often than FHA does, usually several times a year.  However, the changes are usually just small amounts so it's not as noticeable as a 25 basis point reduction.

[lkiar]

https://portal.hud.gov/hudportal/documents/huddoc?id=17-07ml.pdf

Suspended indefinitely....

[Anonymous]

[Anonymous]

So..... any chance they will reinstate the reduction before Feb 28th (our closing date)? Because I was looking forward to that $60/mth savings