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Home FHA CHANGE OCT 4TH 2010!!!

FHA CHANGE OCT 4TH 2010!!!

If you have buyers considering a purchase with FHA financing, it may be to their advantage to act sooner rather than later

On September 1st, FHA officially posted the mortgagee letter describing changes to the FHA MIP program. Effective for FHA loans for which the case number is assigned on or after October 4, 2010, FHA will lower its upfront mortgage insurance premium simultaneously with an increase to the annual premium which is collected on a monthly basis. This policy change will decrease upfront premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions.

The new Up front premium is 1.00%, reduced from 2.25%

Although the up front premium has been reduced, the monthly premium has increased significantly.

The new annual premium is .85% for LTVs less than or equal to 95% & .90 for LTV higher than 95%.

There is no change to the upfront premium for 15 year term with LTV less than 90%. The annual premium for that term with an LTV higher than 90% is .25.

Overall this will represent a payment increase for FHA borrowers obtaining case numbers on or after 10/4/2010.

Posted Tuesday Sep 07