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29 MarFHA Mortgage Insurance Change
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 mortgage lenders with a focus on education. We believe an educated customer is our best customer. The mortgage industry has complicated the process of obtaining a mortgage so much that most customers believe the best way to select a mortgage lender is to inquire about rates and fees. Although rates and fees are an important part of the mortgage process, there are much more important areas to be concerned with. Lending A Hand was created to pass along our experience, knowledge and research to YOU to allow you to become a more educated mortgage customer. If you are planning a home purchase or refinance and live in the state of Colorado, we hope you select the Wynn Team as your mortgage lender!
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[...] 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/.