This is really just a reminder, but I want to make sure that if you are looking at homes, you remember that date!! Any case numbers ordered on or after April 9, 2012 will have increased costs, so if you are looking and can get a purchase agreement done prior to that, it will save you money!!
Currently FHA is charging a 1% upfront mortgage insurance premium and a monthly of 1.15% for loan to values over 95.00%, if your loan to value is 95.00 or less, the monthly premium is 1.10%. On April 9th, the upfront premium will go to 1.75% (it's added to your mortgage amount) and the monthly will increase by 10 basis points (.10%).
New Annual Mortgage Insurance Premium Schedule Effective April 9, 2012
The MIP schedule for FHA loans with terms greater than 15 years ( 20-year fixed FHA, 30-year fixed FHA) is as follows :
- For loans with LTV greater than 95 percent : 1.250% percent annually
- For loans with LTV less than, or equal to, 95 percent : 1.200% percent annually
The schedule for FHA loans with terms less than or equal to 15 years is as follows :
- For loans with LTV greater than 90 percent : 0.600% percent annually
- For loans with LTV less than, or equal to, 90 percent : 0.350% percent annually
- For loans with LTV less than, or equal to, 78 percent : No annual MIP required
In order to qualify for the current mortgage insurance, you need to have a complete loan application and an accepted purchase agreeement. Check with your lender and make sure that you have everything you need for the lender to get a case number. Then I would also verify with the lender that they did pull a case number for you!!
There are additional changes coming in June for those that are looking to refinance a current FHA mortgage. If you currently have an FHA mortgage that was endorsed by FHA prior to May 31, 2009, in June the mortgage insurance premiums will drop! The risk is that rates will increase but they would need to increase substantially for you not to benefit. As of June 9, 2012 any new case numbers will have the lower mortgage insurance.
New Upfront Mortgage Insurance Premium Schedule
Beginning June 11, 2012, all new FHA mortgages replacing an FHA endorsed mortgage from prior to June 1, 2009, will pay an upfront mortgage insurance premium of 0.01%, or $10 per $100,000 borrowed. This is a huge savings compared to the normal 1.75% that will be in effect at that time!
New Annual Mortgage Insurance Premium Schedule
Also beginning June 11, 2012, if you're replacing an FHA mortgage endorsed prior to June 1, 2009, and your new FHA mortgage has a term greater than 15 years ( 20-year fixed FHA, 30-year fixed FHA), your new loan's MIP schedule is as follows :
- For loans with LTV greater than 95 percent : 0.55% percent annually
- For loans with LTV less than, or equal to, 95 percent : 0.55%% percent annually
Or, when the new FHA mortgage has a term of 15 years or fewer ( 15-year fixed FHA), the new loan's MIP schedule is :
- For loans with LTV greater than 90 percent : 0.55% percent annually
- For loans with LTV less than, or equal to, 90 percent : 0.55% percent annually
- For loans with LTV less than, or equal to, 78 percent : No annual MIP required
For those buying and refinancing using FHA loans, these are all important dates! I have had several clients that have wanted to refinance an FHA loan, but with the current mortgage insurance premiums, it didn't save them any money. With these adjustments, it will be easier for most people to refinance and take advantage of the lower interest rates!
Leslie Vanderwerf, NMLS ID#335509, Summit Mortgage - Email – Website
