…before the higher mortgage insurance premiums kick in.
I’ve been alerted by multiple lenders this week regarding the new FHA mortgage insurance premiums set to become effective April 1.
For loans under $625,000 FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent (from 1.15 percent to 1.25 percent), and will increase its upfront premium (UFMIP) by 0.75 percent (from 1 percent to 1.75 percent of the base loan amount).
See all the details in the HUD press release: FHA TAKES ADDITIONAL STEPS TO BOLSTER CAPITAL RESERVES
It is anticipated that this yield cost will actually equate to .375% to .5% in additional cost to the borrower. See Home loan costs to increase.
These changes are effective for all FHA case numbers assigned on or after April 1, 2012, so if you’re in the market for a new home and you’re planning on financing via FHA, you may want to find your new house in March.
theresa
I recently tried to buy a Harcourt-NV home in Carson City, NV. We made the offer, it was negotiated and accepted. It took Jeremy Page, the owner also the owner of NRES-NV1, LLC 3 attempts to get the Sellers Real Property Disclosure filled out right. We proceeded with the inspections, $360.00 for the structural, then it took another 2.5 +/- weeks to come to an agreement to get the necessary repairs agreeded upon. I ordered the appraisal on 2/7/12, then I got a phone call from my realtor on 2/9/12, I promply cancelled the $425.00 appraisal, there is a 120 day IRS lien on the property. I decided to cancell escrow and look for another property rather than wait to see if the IRS would take this property. And if I don’t find another property during March, the FHA insurance rates will go up and increase the payment. I have repeatedly asked for the inspection money back. The realtor for Jeremy is Steve O’Brien, Broker for Harcourts NV1. Under the cercumstances I believe I should get my money back for the inspection, they were advertising the house as a quick close etc. Steve refuses to return my realtor’s phone calls, great guy! Don’t buy from these guys, what a pack of unethical low lifes.
The 120 days won’t be up until April 6, 2012 after FHA raises their insurance costs which the buyer will have to pay.
TE
Jay
My credit union loan officer informed me today, that the PMI for FHA loans have already been raised. From what I understood, it is still available for conventional loans.
Cheryl Dresen
I know buyers are in panic mode due to the up coming increases on FHA loans, starting on April 6th. There is an alternative. You can purchase with a Conventional loan with as little as 5% down payment. If credit is good, your monthly mortgage insurance is only .67%, which is almost half of what FHA will be charging, plus there is NO upfront funding fee rolled in. Call me and we can do the math, and I will show you how this is a great option.
Guy Johnson
Good info, Cheryl. Thank you for sharing.