FHA Changes MIP Insurance Premiums 2013

Starting April 1st, 2013 FHA will change the amount that borrowers pay for Mortgage Insurance

New FHA borrowers will pay as much as 1.55 % for annual FHA mortgage insurance and will pay the FHA MIP for the life of their loan.
For existing FHA borrowers the mortgage insurance terms won’t change. To calculate the Monthly MIP take the loan amount and multiply by 1.5% and divide by 12 months. This is the amount the homeowner will be required to pay in addition to their monthly mortgage payment, property taxes and home owner’s insurance.

 

FHA Changes MIP Insurance Premiums 2013

All FHA Purchase loans and Mortgage Refinance loans on existing FHA Mortgages after June 1, 2009

For new FHA purchase loans and for FHA refinance loans after, June 1, 2009, the  FHA applies a different series of mortgage insurance premiums.

FHA will continue to assess an upfront mortgage insurance premium of 1.75% of the loan size for all new borrowers. i.e. a $100,000 loan would equal $1750 Up Front Mortgage Insurance.  This UFMIP is same rate at which the FHA currently charges.

Annual mortgage insurance rates, however, are changing.

The annual MIP schedule for newer FHA mortgage varies based on three loan traits : (1) Loan-to-value, (2) Loan term, and (3) Loan size.

FHA Changes MIP Insurance Premiums 2013

The annual Mortgage Insurance Premium schedule is as follows :

  • 15-year loan term, LTV less than, or equal to, 78 percent : 0.45% annually
  • 15-year loan term, LTV greater than 78 percent, less than 90 percent : 0.45% annually
  • 15-year loan term, LTV greater than 90 percent : 0.70% annually
  • 30-year loan term, LTV less than, or equal to, 95 percent : 1.30% annually
  • 30-year loan term, LTV greater than 95 percent : 1.35% annually

In addition, FHA mortgages for which the loan size exceeds $625,500 are subject to additional MIP.

Loan terms less for 15 years or less require an extra 0.25 percentage points of annual MIP.
Loan terms of more than 15 years, including the 30-year fixed rate mortgage  are subject to a 0.20 percentage point increase.

The new annual MIP rates go into effect for all new FHA loans beginning April 1, 2013.
On the 15-year loan term with loan-to-value of seventy-eight percent or less. For this loan scenario the new rate goes into effect June 3, 2013.

FHA is also changing its policy which allows for MIP cancellation.

FHA cancels MIP for homeowners who have paid mortgage insurance for at least 5 years on a 30-year fixed rate loan, and whose loan size is less than 78% of the lower of a home’s original purchase price or appraised value.

Beginning in June, the FHA will remove annual MIP after 11 years for homeowners whose starting LTV is 90% or less.
For everyone else, including those making a 3.5% down payment FHA will assess MIP for the duration of the loan’s term.

 

 

The new FHA MIP Mortgage Insurance Premiums go into effect Monday, April 1, 2013 and  once your application is underway, you are protected from future changes.

If you have been considering an FHA mortgage for your next home purchase or an FHA refinance loan / Streamline Refinance program don’t wait.

The longer you wait the more you will have to pay in mortgage insurance.

FHA Changes MIP Insurance Premiums 2013

FHA Mortgage Borrowers pay mortgage insurance in 2 parts.

1.  Part one  is called “upfront mortgage insurance” (UFMIP) and it’s a one-time payment that is made at closing. UFMIP is traditionally added to your loan size, and is not used in loan-to-value (LTV) calculations for an FHA loan.

2. Part 2 of FHA mortgage insurance is known as the annual mortgage insurance premium MIP
Annual MIP is paid monthly as part of your regular mortgage payment.

Unlike upfront mortgage insurance premiums annual MIP payments vary based on your loan term, your loan-to-value, and your loan size.

Refinance Existing FHA Mortgage Loans with an Endorsement date before June 1, 2009

Did you get your FHA loan prior to June 1st 2009? Are your Mortgage Payments on time?
You could qualify for a free Refinance Loan with no closing cost!

The FHA rewards its long-time customers with low MIP rates.

If your current FHA-insured mortgage endorsement date is before June 1, 2009  FHA will allow to you use the FHA Streamline Refinance program and not require you to pay the new, higher MIP rates.

For these older loans the UFMIP charged is equal to 0.01% of your loan size, or $10 for every $100,000 borrowed. This amount is added to your loan balance at the time of closing such that a homeowner in Orange County California or Los Angeles County borrowing at the FHA jumbo loan limit of $729,750 would pay seventy-three dollars.

The annual mortgage insurance premium schedule for such “old loans” is similarly low :

  • 15-year fixed rate mortgage with loan-to-value of 78% or less : No annual MIP required
  • 15-year fixed rate mortgage with loan-to-value greater than 78% : 0.55% annual MIP
  • 30-year fixed rate mortgage, all loan-to-values: 0.55% annual MIP

In our same example, if the Maryland homeowner uses an FHA Streamline Refinance to refinance into a 30-year FHA mortgage, the monthly MIP would be $334.

Note : These special mortgage insurance rates apply to FHA refinances only. This may include the FHA Streamline Refinance, or a credit-qualifying FHA refinance.

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