Changes Are Coming to FHA Loans
FHA will be changing up front and annual MIP costs for buyers making purchases after October 4, 2010.
HUD has issued their mortgagee letter 2010-28 with information of importance to buyers, lenders and realtors that sell homes using FHA financing. There will be a decrease in the up-front mortgage insurance premium (MIP) to 1.%.
The new premiums for both the up-front and monthly charges will be effective to all FHA case number on or after October 4, 2010. It will apply to new purchases, full credit qualifying refinance and streamline refinance transactions.
Also increased are the monthy premiums. For loans greater than 15 year term, if the LTV is less than 95%, there will be a .85% increase in the monthly premium. For loans over 95% LTV, the increase will be .90%.
With loans that are less than or equal to 15 year term, and LTV is less than 90% there is no increase in monthly premium. With greater than 90% LTV there will be a .25% increase.
