FHA Mortgage Insurance Changes
– INCREASE TO FHA MONTHLY MORTGAGE INSURANCE PREMIUM
Before October 4, 2010, the Monthly Mortgage Insurance Premium was based on a factor of .55% of the loan amount divided by 12 (if the loan to value was over 95%) As of October 4, the factor has increased to .9% On a $400,000 mortgage, using the old factor of .55% the monthly mortgage insurance would have been $183 with the new monthly mortgage insurance factor of .9% the monthly payment in comparison with the previous loan amount would be $300 a month. Even though the monthly payment increases the upfront insurance premium has decreased so there is less out of a borrowers pocket upfront.
– FHA UPFRONT MORTGAGE INSURANCE PREMIUM DECREASED
Before October 4, 2010 the Upfront Mortgage Insurance Premium was 2.25%. After October 4th the (UFMIP) was decreased to 1% Using the same base loan amount as our previous example of $400,000 and using the old (UFMIP) of 2.25% $9,000 would have been added to the Idaho home buyers loan. The payment would have been based on a total loan amount of $409,000. With the new upfront mortgage insurance premium of 1% the total loan amount would be only $404,000.
– FHA STILL BEST OPTION FOR IDAHO FIRST TIME HOME BUYERS
FHA mortgages are still the best option for first time home buyers looking to purchase in Idaho. While conventional fannie and freddie guidelines continue to be very tight FHA is still fairly flexible. FHA allows for lower fico (credit scores) as well as as little as 3.5% down payment. FHA also has more of a “makes sense” underwriting philosophy. Many Idaho home buyers are finding FHA to be the best choice even if they have quite a bit of money to put down.
Often times borrowers have questions about FHA mortgages. If you have any questions about FHA mortgages feel free to contact me.
Want to find out more about FHA mortgage insurance changes, then visit Andy Radke’s site to learn more about Idaho FHA Mortgage Insurance Changes.