April 24, 2013
(Moline, IL) – If you’re in the market for a home loan and you are considering an FHA loan, be prepared for some changes.
As of April 1, 2013, if you are purchasing a home and hope to use an FHA (Federal Housing Authority) loan for your financing, you will notice an increase in the annual mortgage insurance premium charged. Depending on the term and loan to value (LTV) of your loan the insurance in our market will increase by 10 basis points.
In addition, effective June 3, 2013, mortgage insurance cannot be cancelled on FHA loans at the 78% loan to value (LTV) mark, which is the current criteria for dropping this insurance. At minimum it will be 11 years into the loan and may be for the entire life of the loan, depending on the original terms. Also on June 3, an FHA loan with terms up to 15 years is now required to use mortgage insurance even if it has a 78% LTV at origination, at a rate of 45 basis points and must be retained for 11 years at minimum.
“It used to be that people could stop paying mortgage insurance premiums after a certain point, if they paid down the loan below a certain level, and now that’s no longer going to be the case,” said Jane Schneider, President of Shelter Mortgage.
These changes are necessary to provide adequate reserves against losses by FHA and strengthen FHA’s Mutual Mortgage Insurance Fund.
Shelter Mortgage, formally 1862 Mortgage, has partnered with Ruhl&Ruhl REALTORS to offer a convenient one-stop experience for both home buying and home financing needs nationwide. As part of a strong and stable bank, Shelter Mortgage offers the promise of longevity and security along with a commitment to service excellence.
A family-owned company since 1862, Ruhl&Ruhl Realtors has grown to nearly 290 sales associates, 58 employees and twelve offices, selling more than 5,000 homes in eastern Iowa, western Illinois and southwestern Wisconsin. The company has residential sales offices in Bettendorf, Burlington, Cedar Rapids, Clinton, Davenport, DeWitt, Dubuque, Iowa City, Maquoketa, Muscatine and Washington, Iowa; and in Moline, Illinois. In addition to residential sales, the company offers services in relocation, property management, real estate investments, new home sales, land development, farm and land sales, senior services, home vendor services, insurance services through the Nelson Brothers Agency and mortgage services through Shelter Mortgage. For more information on Ruhl&Ruhl Realtors, visit their website at www.RuhlHomes.com.