Ann Arbor Area buyers, the FHA Changes are coming. In order for these changes to not be applied to you, time to get under contract and get your mortgage application in.
PMI, Private Mortgage Insurance rates are going up.
Begin your Ann Arbor Area home search here.
FHA first shared these changes on August 4th, after it had been approved by Congress and then the President signed off on it on August 11th. FHA has finally come out with the mortgagee letter, ML 2010-28, which puts it officially in writing now.
This mortgagee letter is effective on FHA loans in which the case number is assigned on or after October 4th, 2010. This policy will increase the monthly mortgage insurance and decrease the mortgage insurance premiums for purchase money and refinance transactions, to include FHA streamline refinances.
So what are the major FHA changes regarding mortgagee letter 2010-28? - For terms greater than 15 years -
- LTV's <= 95% will increase the monthly fee to 85 bps >> Old monthly fee was .50 bps
- LTV's > 95% will increase the monthly fee to 90 bps >> Old monthly fee was .55 bps
And lastly, it will reduce the Upfront Mortgage Insurance Premium, UFMIP, from 225 basis points to 100 basis points.
How will this affect new homebuyers?
3 quick examples (these examples are putting the minimum down payment of 3.5%)
- On a $275,000 mortgage – the change in payment would be about $70 higher a month
- On a $200,000 mortgage – the change in payment would be about $45 higher a month
- On a $125,000 mortgage – the change in payment would be about $27 higher a month
Buyers Beware - If you have your eye set on a specific home, or are negotiating on a property, or are very serious about buying soon, you will have 31 days to make a mortgage application before these new changes take place.
These 2 posts I wrote previously below go into more details about the changes and showing more detailed figures.
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For more information on FHA loans, please go to this link. The FHA Expert
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors
Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc
Missy Caulk & Team can be reached at 734-926-9797 or email: Missy@MissyCaulk.com
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not a bad idea for them to raise money
to pay for defaults!
Missy.... thanks for reblogging this and for getting the information out there. I just added this to my post :
FYI in regards to Charlie Ragonesi's comment, #4 - I still don't think that this will move buyers from FHA loans to conventional loans. Here is my reason why... please read : FHA loans vs conventional loans - The buyer's buying power will only decrease by about $10,000 or so.
thanks
One more reason for those buyers sitting on the fence to finally jump! Good information to pass on to them:)
Good evening Missy,
Thanks for the re-blog..I missed this one. Great information and glad I caught your post! I saw your sons picture with Michael (they had lunch together). How many kids do you have and are they scattered all over the country and in real estate??
Missy
A good amount on premium increase but it does generate revenue
Dorie, I have 5 children, two in TN, Christa, Andrew (who just finished pre-licensing) and Allyssa.
Great re-blog Missy! I guess I need to start following Jeff!
Missy
Thanks for sharing the FHA updates.
Good luck and success.
Lou Ludwig
Financing weaves, bobs, detail is education needing blogging to spread the word on how it works, how it is changing.
Good information, Missy ~ thanks for the repost. Working on an FHA financed HUD deal right now.
WE the government sure have a lot of defaulted loans to bail out. Should we take out a loan from the IMF? *chuckle...*
Changes, changes changes! Enough to drive you crazy.
Just wait till we lose mortgage brokers next year.....that will be a mess....