FHA Changes Again

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 karen@landmarkmortgage.com .

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