Tuesday, February 28, 2012

IMPORTANT: Information that will affect FHA BUYERS!

Here is some IMPORTANT information that will affect FHA BUYERS!

FHA is Increasing the Upfront MIP from 1.0% to 1.75%.  It is also increasing the Monthly Insurance Premium from 1.15% to 1.25%.  Both increases will take affect with case numbers assigned on or After April 1st.

That means for a Purchase Price of $150,000 the increase will raise the monthly mortgage payment by approx $18 per month.  Although the announcement says the Upfront Premium will add approx $5 per month to the average borrower, it conveniently left out the additional 0.1% increase in the Annual MIP which raises it another $13 per month.

Buyers have to have accepted purchase offers prior to March 31st.

New premium structure will help protect FHA’s MMI fund
WASHINGTON – As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans.  FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount.  Upfront premiums (UFMIP) will also increase by 0.75 percent
These premium changes will impact new loans insured by FHA beginning in April and June of 2012.  Details will soon be published in a Mortgagee Letter to FHA-approved lenders.
“After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante.  “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

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.

FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month.  These marginal increases are affordable for nearly all homebuyers who would qualify for a new mortgage loan.  Borrowers already in an FHA-insured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.
Taken together, these premium changes will enable FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund, contributing more than $1 billion to the Fund, based on current volume projections through Fiscal Year 2013.


For Mortgage Questions or needs contact Jeff Armstein or Real Estate Questions or Needs contact Joseph D'Ambrosio at the number below,

"Opening The Door To Opportunity and Your Future Home..."
Jeffrey Arnstein                        Joseph D'Ambrosio
Senior Mortgage Banker                     Executive Sales Associate
AmeriFirst Financial, Inc.                    Keller Williams Northeast Reality
15111 N. PIMA RD Suite 110             2005 W. Happy Valley Rd #150
Scottsdale, AZ 85260                         Phoenix, AZ, 85085
(602) 363-6030                                   Cell: 623-810-4824
Email: jarnstein@amerifirst.us           Email: joseph.dambrosio@kw.com
                                                            Website: www.Arizona-HomeBuying.com
                                                            Website: www.Arizona-HomeBuying.kwrealty.com

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