FHA Changes Coming Soon...
The Federal Housing Administration (FHA) recently announced some major changes coming to the very popular mortgage loans. These changes are to the mortgage insurance premiums (MIP) charges associated with the majority of FHA loans. First, FHA will be increasing the amount of the premiums charged to borrowers across the board. These premium increases are set to go into effect for FHA case numbers assigned after April 1st, 2013. The other major change to the MIP's will be to the length of time borrowers are required to carry the premiums on their mortgage. It is my understanding that these changes will go into effect for case numbers assigned after June 3rd, 2013. Call your mortgage lender for the specifics, but here are the 2 changes that I see effecting the largest percentage of borrowers.
- For borrowers with less than 10% down payment they used to have MIP until they reached a 78% Loan-to-value and at least had the insurance for 5 years. As of June 3rd, 2013 they will now have to pay the MIP for the entire life of the loan.
- For borrowers with less than 5% down payment and a loan amount less than $625,000 the MIP premium on their loan used to be charged at 120 basis points. As of April 1st, 2013 this premium will be increased to 130 basis points.
For a complete list of changes to less popular FHA loan terms please feel free to call or email me. The bottom line is the changes are coming so if you are considering using an FHA mortgage to purchase your next home, CONTACT ME TODAY. There is still time to act before then changes take place.