Tuesday, February 5, 2013
Will FHA Backed Mortgages Increase Mortgage Insurance Premium?
ATTENTION BUYERS! CONSIDER BUYING A HOME NOW TO AVOID PRICE INCREASES!
FHA has announced a few changes today that will be important to communicate to your clients.
Beginning April 1st, 2013, most FHA-backed mortgages will be subject to a Monthly Mortgage Insurance increase of 10 basis points (from 1.25% to 1.35%).
But probably the biggest news announced today is FHA’s change to their Mortgage Insurance Cancellation Policy.
Beginning June 3rd, 2013 FHA has reversed its policy which allows homeowners to cancel their mortgage insurance premiums once the outstanding principal balance of the FHA loan reaches 78 percent of the original balance. Going forward with loans closed after June 3rd, FHA will disallow the removal of MIP throughout the life of the loan if the loan’s starting loan balance is higher than 90% of its appraised value.
This might be some important news to share with any of your FHA clients who are on the fence about buying.
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