The Federal Housing Authority (FHA) will have a new premium structure for FHA-insured single-family mortgage loans, increasing the Annual Mortgage Insurance Premium (MIP) it collects by 0.10 percent. These premium changes will impact new loans insured by the FHA, effective April 9, 2012. Loans with amortization terms of 15 years or less, and a loan-to-value ratio of 78% or less, remain exempt from the Annual MIP.
FHA reports that this increase is a part of ongoing efforts to encourage the return of private capital to the housing market and to protect capital reserves, according to a statement.
In addition, the Up Front Mortgage Insurance Premium (UFMIP) will increase from 1 percent to 1.75 percent of the base loan amount, effective April 9, 2012 as well. This increase applies regardless of the amortization term or loan to value ratio. FHA will continue to permit financing of this charge into the mortgage. The FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month.
The above increases will impact all newly originated FHA mortgages for purchase and refinances, unless the homeowner qualifies for the new reduced mortgage insurance rates with an FHA streamlined refinance. The changes to mortgage insurance do not apply to FHA’s reverse mortgages.
FHA Streamlined Refinances will have reduced FHA mortgage insurance premiums IF the FHA loan being refinanced was endorsed on or before May 31, 2009, effective on case numbers issued on or after June 11, 2012. Upfront mortgage insurance premiums will be reduced from 1% to 0.01% of the base loan amount and the annual mortgage insurance will be reduced to 0.55% of the loan amount. Borrowers must be current on their existing FHA insured mortgage.
If your FHA loan being refinanced was endorsed June 1, 2009 or later, then the reduced rate does not apply.
To find out more information, contact Jane Schneider at 1862 Mortgage or any 1862 Mortgage Loan Officer for more information at 866.441.1862 or Info@1862Mortgage.com.
1862 Mortgage has partnered with Ruhl&Ruhl REALTORS to offer a convenient one-stop experience for both home buying and home financing needs nationwide. 1862 Mortgage is a DBA (Doing Business As) of Shelter Mortgage, an operating subsidiary of Guaranty Bank. As part of a strong and stable bank, 1862 Mortgage offers the promise of longevity and security along with a commitment to service excellence.
A family-owned company since 1862, Ruhl&Ruhl REALTORS annually sells nearly 3,800 homes in eastern Iowa, western Illinois and southwestern Wisconsin and is the largest privately-owned real estate company in Iowa. Headquartered in Davenport, Iowa, the company has 280 sales associates and 50 employees based in 11 sales. In addition to residential sales, Ruhl&Ruhl REALTORS offers services in relocation, new home sales, farm and land sales, senior services, real estate investment, mortgage services through 1862 Mortgage and insurance services through the Nelson Brothers Agency. For more information on Ruhl&Ruhl REALTORS, visit their website at www.RuhlHomes.com