As many of you are aware, on April 1st of this year, the FHA made changes to their monthly mortgage insurance by raising the premium by 10 basis points. For instance, if you were only putting 3.5% down on a FHA loan before April, your monthly payment MIP (Mortgage Insurance Payment) would have been 1.25% and now it would be 1.35%.
What some of you may not be aware of is that there is another change on the horizon for FHA. As of June 3rd, 2013 FHA will change how long you will be required to keep the monthly MIP on your mortgage. If you are making less than a 10% down payment, you will be required to carry MIP for the life of your loan. As you can see in the chart below, this change will affect all FHA mortgages.
|≤ 15yrs||≤ 78||No annual MIP||11years|
|≤ 15yrs||>78 – 90.00||Cancelled at 78% LTV||11years|
|≤ 15yrs||>90.00||Cancelled at 78% LTV||Loan term|
|>15yrs||>78 – 90.00||Cancelled at 78% LTV &5yrs||11years|
|>15yrs||>90.00||Cancelled at 78% LTV &5yrs||Loan term|
Don’t worry, you don’t have to close by June 3rd. However, you will need to have an FHA case number locked in by a loan officer before June 3rd, so give us a call and let’s get the process started for you!