FHA Annual MIP & Up-Front MIP changes April 2012

HUD has issued Mortgagee Letter 12-4 announcing changes to the FHA Single Family Annual Mortgage Insurance Premium (Annual MIP) and Up-front Mortgage Insurance Premium (UFMIP).  If you don’t want to read below the bottom line is that it is going to cost you more to get an FHA loan to buy a home. If you want the details, check them out:

Highlights include:

  • Annual MIP increasing by 10 bps (basis points)
    • Loan amounts ≤ $625,500
    • Mortgages with terms ≤15 years and LTV ≤78% remain exempt from the Annual MIP (ML 11-35)
    • Effective date:  Case number assignment date April 9, 2012

 

  • Annual MIP increasing by 25 bps
    • Loan amounts > $625,500
    • Mortgages with terms ≤15 years and LTV ≤78% remain exempt from the Annual MIP (ML 11-35)
    • Effective date:  Case number assignment date June 11, 2012

 

  • Annual MIP decreasing to 55 bps – Streamline RefinancesEffective date:  Case number assignment date June 11, 2012
    • Streamlined Refinances endorsed on or before May 31, 2009
      • Endorsement date is on the Case Query screen in FHA Connection 

 

  • UFMIP increasing to 1.75% of base loan amount    
  • Regardless of loan amount, term or LTV
  • Currently the rate is 1% of the loan amount
  • FHA will continue to permit financing of this charge into the mortgage and will continue to calculate actual premium changes against the base loan amount before adding any financed UFMIP
  • Fortunately, the upfront MIP can be financed and amortized over the life of the loan.
  • Effective date:  Case number assignment date April 9, 2012

 

  • UFMIP decreasing to 0.01% –  Streamline RefinancesEffective Date:  Case number assignment date June 11, 2012
    • Streamlined Refinances endorsed on or before May 31, 2009
      • Endorsement date is on the Case Query screen in FHA Connection
The above increases will impact all newly originated FHA mortgages for purchase and refinances, unless the home owner qualifies for the new reduced mortgage insurance rates with an FHA streamlined refinance.  The cost of getting an FHA loan just increased again for what seems like the umpteenth time since 2010.
Don’t forget that you can get a conventional loan, assuming you can get approved for as little as 5% down, which just became an even better option.



Shanna Lafontaine is a Realtor with RE/MAX Affiliates who works Metro Columbus, Dublin, Hilliard, Powell, Worthington, Westerville, Delaware and surrounding Central Ohio areas helping both Buyers and Sellers.

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RE/MAX Affiliates Inc. 7239 Sawmill Rd. Ste 210, Dublin, OH 43016

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