FHA Mortgages, Mortgage Guidelines, Mortgage News

FHA Insured Home Loans Get More Expensive April 1, 2012

March 2, 2012 by · Leave a Comment 

FHA MIP Changes April 1 2012Beginning April 1, 2012, the FHA is once again raising mortgage insurance premiums (MIP) on its newly-insured borrowers throughout Northwest Indiana and the country.

It’s the FHA’s fourth such increase in the last two years.

Beginning April 1, 2012, upfront mortgage insurance premiums will be higher by 0.75% and annual mortgage insurance premiums will be higher 0.10% per year.

Click here to apply for your FREE home loan approval.

For borrowers with a loan size of $200,000, the new MIP will add $1,500 in one-time loan costs plus a reoccuring $200 increase in the annual mortgage insurance premium.

All new FHA loans are subject to the increase — purchases and refinances.

The FHA is increasing its mortgage insurance premiums because, as an entity, the FHA is insuring a much larger percentage of the U.S. mortgage market than ever before. 

In 2006, the FHA insured 2 percent of all purchase-money mortgages. In 2011, that figure jumped to 18 percent. Unfortunately, as the FHA has insured more loans, it’s number of loans in default have climbed forcing the FHA to boost its reserves.

Click here to apply for your FREE home loan approval.

Beginning April 1, 2012, the new FHA annual mortgage insurance premium schedule is as follows:

  • 15-year loan term, loan-to-value > 90% – 0.60% MIP per year
  • 15-year loan term, loan-to-value <= 90% – 0.35% MIP per year
  • 30-year loan term, loan-to-value > 95% – 1.25% MIP per year
  • 30-year loan term, loan-to-value <= 95% – 1.20% MIP per year

In order to calculate what your FHA annual mortgage insurance premium would be on a monthly basis, multiply your beginning loan size by your insurance premium in the chart above and then divide by 12.

In addition, for loans over $625,500, beginning June 1, 2012, there is an additional 25 basis point increase to annual MIP.

To avoid paying the new FHA mortgage insurance premiums, start your FHA mortgage application today. Existing FHA-insured homeowners in Northwest Indiana will not be affected by the change.

Mortgage insurance premiums will not rise for loans already in the loan process. What are you waiting for?

Click here to apply for your FREE home loan approval.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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