April Fools?! FHA MIP (Mortgage Insurance) Increase Alert
Please read below and act immediately to lock in your low, fixed FHA mortgage
Florida home buyers, this is your warning! There is an immediate change coming to the market. The FHA Mortgage Insurance Premium (MIP) will increase for all mortgage applications completed after April 1, 2012. This FHA MIP increase will affect BOTH the monthly premium amount as well as the annual premium.
What does this mean? Simply put, your Florida FHA loan will cost more on a monthly and up-front basis if you wait until after April 1, 2012 to apply for an FHA mortgage. Lock in your low FHA mortgage by applying online with an Orlando Mortgage Broker:
How much will it increase? The April 1, 2012 FHA MIP monthly and annual increases are as follows:
- 10 basis point increase in annual premium for single family forward mortgages (increased from 1.15% to 1.25% annual premium)
- 25 basis point additional increase for loans above $625,500 (increased from 1.25% to a 1.5% annual premium)
- Increase the upfront premium on new originations by 75 basis points (significant increase from 1% to 1.75%)
Upcoming FHA Policy Changes
Revised Seller Concession Policy
Last Thursday, HUD published a request for comments (due in 30 days, by March 26) on their revised changes to FHA policies on seller concessions. Some of you may recall that HUD had initially proposed the reduction of seller concessions from the current 6% to 3% bak on July 15, 2010. The new proposal is as follows:
- Reduction of seller concessions to 3% OR $6,000, whichever is greater.
- Acceptable closing costs allowed to be paid by seller concessions: closing costs, prepaid items, discount points, up-front MIP, and any interest rate buy down
- Changes the definition of “interested third party” by adding lender, mortgage broker and settlement company to the list.