Yes the FHA is changing its mortgage insurance premium schedule
for the second time this year, and this time it’s more towards the benefit of many prospective
borrowers than the last time around. However, while some FHA mortgage applicants will pay lower mortgage insurance
premiums going forward, others will pay more. The new premiums apply to all FHA
mortgages, both purchase and refinance.
The
MIP (Mortgage Insurance Premium) update will be the fifth time in the past four
years that FHA has changed its mortgage insurance premium schedule. FHA-backed
homeowners who have not refinanced within the last three years will benefit
from the new MIP. This is because homeowners whose current FHA mortgage pre-dates
June 1, 2009 will be entitled to substantially reduced annual mortgage insurance
premiums and almost no upfront MIP via the FHA Streamline Refinance program.
This is GREAT news for those folks!
Now,
for the not so good news. New FHA applicants may pay up to 1.25% per year for
annual mortgage insurance plus 175 basis points at closing for upfront MIP, the
"grandfathered" FHA applicants will pay just 0.55% per year for
mortgage insurance and 1 basis point at closing. Further, homeowners in
high-cost areas whose mortgages are between $625,500 and the local FHA loan
limit, annual mortgage insurance premiums will be raised by 0.25% for all
15-year and 30-year loan terms.
The
FHA continues to play with its mortgage insurance premiums, attempting to find
a comfortable place between affordability for its homeowners and solvency for
its fiscally struggling program. It is widely expected that FHA will change its
premiums again. And, when it does, it's likely that MIPs will rise.
And oh, by the way, these changes I’ve just laid out are in effect today,
Monday June 11, 2012.
Until next
time San Diego, you can contact me, Jason Bernabei, at jasonb@tricastle.com and check me
out each and every Monday on www.therealtyinsiders.com for more, and be sure to
tune in and see myself, and other local industry professionals talking real
estate on "The Realty Insiders," the ONLY real estate show in town!
Jay’s Outlook: partly
sunny
Jason Bernabei, TriCastle Realty
