It's official: FHA was
just given authority to change the amount charged to borrowers for both
the Up Front and the Annual Mortgage Insurance premiums...and
change them they did.
Real Estate Agents: This will impact
how you write up your FHA purchase agreements, as well as any monthly payments
you might estimate for clients .
The new premium amounts will be effective on all
FHA case
numbers assigned on or after October 4, 2010 – so your
clients that already have an FHA transaction in process won't be impacted, but
new FHA clients who come into process on or after October 4th will be subject
to the new guidelines.
Here's what you need to know:
- The Up Front Mortgage Insurance premium is now 1.0 % for all standard
FHA programs, including on purchase money mortgages. This is a significant
change from the 2.25% Up Front Mortgage Insurance typically in place on FHA
30 year Fixed Rate transactions.
- ...but don't break out the party hats just yet – the Annual
Mortgage Insurance premium is now .90% for LTV's greater than 95% on 30 year
loans...and this is also a significant change from the .55% we've
been accustomed to using when we calculate the monthly payment.
** For clients that currently have an FHA loan,
this will make it MUCH more difficult to be able to qualify for an FHA
Streamline rate reduction loan in the future**
- There are different annual premium amounts for lower loan to values and
for 15 year terms, so call me for more details if needed. And by the way,
FHA now has the authority to raise the Annual Mortgage Insurance premium “at
will”...up to 1.55%...so I'll be keeping closely tuned to any changes and
will be sure to keep you informed.
And if you have any
other questions about how these changes will impact you and/or your clients,
call or email me anytime. I'm always happy to review an existing homeowner's
or potentital homeowner's situation, and help them secure the home of their
dreams.
Kathy Delbridge
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