Congress has approved the following MI changes for FHA loans. HUD will be issuing the mortgagee letter that implements the following: Effective with all new FHA loans with case numbers pulled after Sept 7, 2010, the new UFMIP (upfront mortgage insurance premium) is 1% of the loan amount. The new monthly premium amount goes from a .55 factor to a .85-.90 monthly factor.
To better understand these changes here is an example of the difference between now and after Sept 7.
200,000 purchase price – 3.5% down = 193,000 base loan amount.
Current Sept 7, 2010
2.25%=4342.50 1% = 1930 UFMIP
197,342 194,930 total loan amount
88.46 136.71 monthly mortgage insurance
1059.26 1095.65 New principal, interest and mortgage insurance payment at 4.25%
After Sept 7, 2010, it will be at least $36.39 more expensive for a borrower to purchase a home using FHA financing.
If you are currently out there looking to buy a home, here is another reason, besides the many already positive reasons, for homebuying to make a descision and put that offer in.
For any questions, please call or email me at 503 585 1105 or firstname.lastname@example.org .