On January 26, 2010 we let you know about the big changes to FHA in 2010. One of those changes was to FHA’s up-front mortgage insurance premium (UFMIP). Effective on all loans with FHA case numbers assigned on or after April 5, 2010 the up-front mortgage insurance premium will be 2.250% of the base loan amount. This is an increase from 1.75%.
There is no change to the monthly mortgage insurance on FHA loans at this time.
For a full review of this change check out the HUD mortgagee letter.
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Scott & Marla Wynn
Scott & Marla Wynn are passionate about passing along their knowledge of the mortgage business which is why they created LendingAHand.com. As licensed mortgage professionals in Colorado, Scott & Marla also enjoy sharing opportunities for fellow Coloradans to have fun while saving money in Denver.
[...] April 5, 2010 FHA increased their up-front mortgage insurance premium to 2.25% from 1.75%. HUD had approval to increase the up-front mortgage insurance premium (UFMIP) [...]
The FHA program is great. But after this rate increase I have seen many people getting discurage to get a loan. How’s the situation for you guys?
We have not seen a slow down in the FHA business. We talk with a lot of potential customers about FHA versus Conventional mortgage financing and find that many people these days are looking to conserve their cash. FHA accomplishes this in two ways: lower down payment (3.5% vs 5% with Conventional) and lower monthly payment (due to the MI factors on FHA at .55% versus Conventional around .94% depending on the MI company). Even with the higher up-front mortgage insurance premium the impact the payment is minimal. Check out the post on potential changes to monthly MI for the minimal impact UFMIP change had – http://www.lendingahand.com/2010/04/fha-increasing-mortgage-insurance-factor/.