FHA Loan Changes…coming SOON!!! March 10, 2012 by vleeson Leave a Comment Increase to Annual Mortgage Insurance Premium On December 23, 2011, the President signed into law the Temporary Payroll Tax Cut Continuation Act of 2011 (Public Law 112-78), which requires FHA to increase the Annual MIP it collects by 10 basis points (bps). This change is effective for case numbers assigned on or after April 9, 2012. The FHA upfront mortgage insurance premium will increase to 1.75% from 1% of the base home loan amount. This will apply regardless of the term or loan-to-value ratio. The annual mortgage insurance premium on a 3.5% Down, will increase by 10 basis points from 1.15 to 1.25. Term > 15 Years Base Loan Amount LTV Effective Annual MIP Any Amount ≤ 95.00% 9-Apr-12 120 bps Any Amount > 95.00% 9-Apr-12 125 bps Term ≤ 15 Years with LTV above 78% Any Amount ≤ 90.00% 9-Apr-12 35 bps Any Amount > 90.00% 9-Apr-12 60 bps How will this affect a borrower? Example: On a purchase price of $150,000, with 3.5% down, the payment will increase $17.20. From $835.58 to $852.78* *Example is principal, interest and MI only @ 4% interest rate. Coming Soon FHA to reduce allowable seller concessions from 6% to 3%. This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
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