Apr 5, 2011

Mortgage Insurance Premium increase in April

FHA loans are about to get more expensive. FHA loans are a  popular alternative to conventional loans, and they carry an annual mortgage insurance premium (MIP) that is collected as part of the monthly payments.

All fixed rate loans with case numbers assigned on or after April 18,  will see an increase of  .25% across the board, which adds about $30 to a borrower's payment each month. Current FHA loan customers are unaffected by these changes.

Depending on the term and LTV (loan-to-value ratio) of the loan, the new insurance premiums will be:

15-year fixed, LTV more than 90% = 0.50% per year
15-year fixed, LTV less than or equal to 90% = 0.25% per year
30-year fixed, LTV more than 95% = 1.15% per year
30-year fixed, LTV less than or equal to 95% = 1.10% per year

The upfront mortgage insurance premium will stay unchanged at 1% of the loan amount. Guidelines for FHA loans change often because of market conditions. This is the third price change to the MIP in the past year.  [where: 75230]

1 comment:

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