February 28th, 2012 10:02 AM by Kathy Delbridge
HUD Announces Another INCREASE to Upfront Mortgage Insurance and Annual Mortgage Premium
In a Press Release dated February 27, 2012, HUD announced that they will be increasing the Upfront Mortgage Insurance Premium (UFMIP) and the Annual Mortgage Insurance Premium ( MIP).
Important dates to remember are April 1, 2012 and June 1, 2012, as these are the dates when the changes will take effect.
The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP it collects by 0.10 percent. This change is effective for case numbers assigned on or after April 1, 2012. FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500. This change is effective for case numbers assigned on or after June 1, 2012.
The UFMIP will be increased from 1 percent to 1.75 percent of the base loan amount. This increase applies regardless of the amortization term or LTV ratio. FHA will continue to permit financing of this charge into the mortgage. This change is effective for case numbers assigned on or after April 1, 2012.
Once both of these are increased, borrowers will see an estimated payment increase as outlined below:
To read more about this press release, go to http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2012/HUDNo.12-037
If you are a homebuyer looking to purchase a home and want to insure you save money on your new loan, be sure to act now. Case numbers are not assigned until you have made an application and have a contract on a new home.
Hope you find this information helpful.
Have a GREAT day!
Your Mortgage Specialist, Kathy Delbridge