On March 6th, 2012 HUD announced FHA Mortgage insurance changes – below are the changes and dates you need to know…
Bad news for purchases – good news for eligible refinances!
Click here for full mortgagee letter – see below for summary.
Increase to both upfront mortgage insurance and annual mortgage insurance for purchases:
- These changes are effective for FHA case numbers assigned on or after April 9th 2012
- The UFMIP (Upfront Mortgage Insurance Premium) will increase from 1% to 1.75% of the loan amount. This increase applies regardless of the amortization term or LTV ratio.
- The Annual MIP will increase by 10 basis points (bps) – see chart below (Please note that mortgages with amortization terms of 15 years or less and a LTV ratio of 78% or less are exempt from the Annual MIP)
GOOD NEWS FOR ELIGIBLE STREAMLINE REFINANCE TRANSACTIONS – details below:
- This is for FHA loans eligible for a streamline refinance
- These changes are effective for FHA case numbers assigned on or after June 11th 2012
- To be eligible current FHA loan must have been endorsed on or before May 31st 2009 (please do not get confused by this date – it is not the closing date or the application date) Per FHA it could have taken 2 weeks to 3 months to have the loan endorsed so please be aware that the closing date is not sufficient to verify the file is eligible for reduced MIP. We would need to have the existing loan pulled up through our internal systems to verify.
- UFMIP for eligible loans will decrease from the current 1% to .01% of the base loan amount
- Annual MIP will be 55 bps regardless of the base loan amount
This decrease for refinances will open the doors for a lot more FHA clients to refinance. Please note that we can’t order the case number until June 11th – but if you would like me to take a look to see if you will be eligible in the future please contact me – I would be happy to check so you are prepared to take advantage of the lower rates and payments.
Questions? Contact David Krushinsky Today!
