topic Re: FHA to reduce mortgage insurance premiums by 25 bps! in Mortgage Loans

FHA to reduce mortgage insurance premiums by 25 bps!

Anonymous — Mon, 09 Jan 2017 16:39:12 GMT

FHA will be reducing their annual mortgage insurance premiums by 25 basis points for all loans closed on or after January 27th. For someone purchasing a $300,000 home, this equals a $60 reduction in monthly payment. Huge news with the recent rate spike we have seen!

https://portal.hud.gov/hudportal/documents/huddoc?id=17-01ml.pdf

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Anonymous — Mon, 09 Jan 2017 16:43:02 GMT

Sweet! Is this something that was just announced? I received a quote at the end of last year and I'm curious if this lowered premium is reflected in the numbers I was given.

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Anonymous — Mon, 09 Jan 2017 16:41:19 GMT

It was announced today!

Re: FHA to reduce mortgage insurance premiums by 25 bps!

StartingOver10 — Mon, 09 Jan 2017 19:31:00 GMT

Nice! What a great reduction! Thanks for keeping us posted.

Re: FHA to reduce mortgage insurance premiums by 25 bps!

happypill — Mon, 09 Jan 2017 22:25:12 GMT

Awesome news, thanks for sharing!

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Sbrooks1 — Wed, 11 Jan 2017 00:17:12 GMT

Thanks for keeping us informed!!!

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Anonymous — Wed, 11 Jan 2017 00:44:49 GMT

This is GREAT NEWS!! I do have a question about it, I know in the past that these types have changes have been based on when the case number is assinged. Is it me or does it seem that this rate reduction is not based on that, but when the loan is closed and funded? My loan officer is adamant that it is based on when the case number is assigned.

I just received my clear to close today under the Back To Work program (I konw I am shocked too) and we are scheduled to close on the 23rd, which also is the date when our rate lock expires. Seems to me that it would be cost effective to pay to extend the lock and close after the 27th if I am reading the new mandate correctly.

Any insight into this would be helpful.

Re: FHA to reduce mortgage insurance premiums by 25 bps!

DallasLoanGuy — Wed, 11 Jan 2017 01:27:56 GMT

Sometimes it is important for you guys to hear a more technical analysis of a program change like this so you can decide whether this is a good thing or not.....

So.... sit back, grab some popcorn.... enjoy the ride.

FHA sucks less now.

Please exit to your right. The ride is over

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Sbrooks1 — Wed, 11 Jan 2017 01:37:09 GMT

Lol! The PMI is such a ripoff , but what are people like me to do!!!

Re: FHA to reduce mortgage insurance premiums by 25 bps!

ShanetheMortgageMan — Wed, 11 Jan 2017 06:18:56 GMT

@Anonymous wrote:
This is GREAT NEWS!! I do have a question about it, I know in the past that these types have changes have been based on when the case number is assinged. Is it me or does it seem that this rate reduction is not based on that, but when the loan is closed and funded? My loan officer is adamant that it is based on when the case number is assigned.

I just received my clear to close today under the Back To Work program (I konw I am shocked too) and we are scheduled to close on the 23rd, which also is the date when our rate lock expires. Seems to me that it would be cost effective to pay to extend the lock and close after the 27th if I am reading the new mandate correctly.

Any insight into this would be helpful.

You are correct, in the past it's based on the FHA case # assignment date. However this update is when the loan is funded, not when the FHA case # is assigned.

Definitely would be worth it to extend the rate and get the lower mortgage insurance. Hopefully your lender offers a short rate lock extension like 5 days, so you don't have to pay a larger extension fee for a 15-day extension like a lot of lenders only offer.

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Anonymous — Wed, 11 Jan 2017 16:15:58 GMT

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

Re: FHA to reduce mortgage insurance premiums by 25 bps!

ShanetheMortgageMan — Wed, 11 Jan 2017 16:33:21 GMT

@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).

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Anonymous — Thu, 12 Jan 2017 17:18:09 GMT

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!!

Re: FHA to reduce mortgage insurance premiums by 25 bps!

StartingOver10 — Thu, 12 Jan 2017 17:27:47 GMT

@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.

Re: FHA to reduce mortgage insurance premiums by 25 bps!

ShanetheMortgageMan — Wed, 18 Jan 2017 21:49:13 GMT

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).

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Client9 — Thu, 19 Jan 2017 05:03:30 GMT

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.

Re: FHA to reduce mortgage insurance premiums by 25 bps!

ShanetheMortgageMan — Thu, 19 Jan 2017 05:41:51 GMT

@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.

Re: FHA to reduce mortgage insurance premiums by 25 bps!

lkiar — Fri, 20 Jan 2017 19:11:15 GMT

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

Suspended indefinitely....

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Anonymous — Fri, 20 Jan 2017 21:11:35 GMT

Re: FHA to reduce mortgage insurance premiums by 25 bps!

Anonymous — Fri, 20 Jan 2017 22:35:56 GMT

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