Register Login (480) 240-9724
  • Email
  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube
  • Home
  • Search
    • Search All Properties
    • Search by Map
    • New Build Home Search
    • Featured Listings
    • New Listing Notifications
  • Neighborhoods
    • Chandler
    • Gilbert
    • Mesa
    • Phoenix
    • Queen Creek
    • San Tan Valley
  • Buyers
  • Sellers
    • Sellers
    • What’s My Home Worth?
    • We Buy Houses in Arizona!
  • Blog
  • About
    • Our Agents
    • Our Mission
    • Client Testimonials
    • Explore the East Valley
    • Shea Preferred Realty Group
    • Security Title Agency
  • Contact
Home > FHA Mortgage Insurance Premiums To Change

FHA Mortgage Insurance Premiums To Change

August 9, 2010 by vleeson Leave a Comment

There is more change on the way for FHA mortgage insurance premiums, after legislation from the House of Representatives this past week was passed, allowing for an increase annual mortgage insurance premiums. That change will go into effect September 7, 2010.

All FHA loans have two types of mortgage insurance premiums that serve to protect HUD, which backs FHA loans, to insure themselves over potential losses on mortgage. Those are, the upfront mortgage insurance premium, which is paid is added to the loan amount borrowed in a lump sum at closing. Add the annual mortgage insurance premium, which is paid for on a monthly basis with one’s mortgage payment.

In April, the upfront mortgage insurance premium was raised from 1.75% to 2.25% of the loan amount being insured, making FHA loans more costly upfront for borrowers. For instance, if you were taking out a $200,000 loan, this translated to an increase in your upfront mortgage insurance premium in the amount of $1,000.

However, recently Housing and Urban Development (HUD) has said that if they were given the authority to increase the annual mortgage insurance premiums, that they could reduce the upfront mortgage insurance premiums to as low as 1%.

That brings us back to the current, legislation, HR 5981, which has been now approved allowing HUD to raise the statutory cap on annual mortgage insurance premiums from 0.55% to 1.55%.

HUD was quick to respond and the mortgage insurance premiums are already scheduled to go into effect September 7th. HUD plans to increase annual premiums for FHA mortgage insurance to 0.85% for borrowers with loan-to-value ratios of up to 95 percent and to 0.9% for borrowers with higher LTVs. In addition, the upfront mortgage insurance premium as well is set to drop to 1%.

The way premiums are currently structured, a borrower taking out a $200,000 loan with the 3.5% minimum down payment pays an upfront premium of about $4,500, plus $1,100 a year in annual premiums.

In addition, the upfront premium roll back to 1% would mean that a borrower would pay an upfront premium of about $2,000, plus $1,800 a year in annual premiums. The $700 increase in annual premiums would translate into an additional $58 a month on their mortgage payment.

So, if you are waiting to buy…you may want to get in on the low rates now…give us a call today @ 480-889-1424.

Filed Under: Uncategorized

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

New Listing
Notifications

  • Email Alerts for New Homes
  • Save Your Favorites
  • Price Change Notifications
  • Plus More...
Sign Up

What's Your
Home Worth?

Find Out

Categories

Client Testimonials

"I liked the ease of communication; I didn’t have any hiccups, and we closed early, so I can’t complain at all.  I would recommend Ben... continued"
- Alex
View All

Listing Notifications

Sign Up! New listings delivered to your inbox!
Sign Up Now

Stay Connected

  • Email
  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube

Arizona Experience Realty Group

We strive to provide unparalleled customer service so that our clients, both buyers and sellers, are thrilled with the outcome and comfortable with the entire process. We make it our mission to be resourceful, responsive, and attentive to each client, supporting them with the most progressive and efficient technology.

Meet Us

Arizona Experience Realty Group

36460 N Encanterra Drive
San Tan Valley, AZ 85140

(480) 240-9724
Contact Us

sitemap   •   admin   •   ©2025 All Rights Reserved  •  Real Estate Website Design by IDXCentral.com