ATTENTION-DENVER-FHA-INCREASES-MIP-APRIL-1STDid you know that effective April 1, 2012 purchasing a home with a Federal Housing Administration (FHA) loan will be more expensive? Carol Galante, acting FHA Commissioner, recently announced a new premium structure for FHA-insured single family mortgage loans. For FHA case numbers assigned on or after April 1st, 2012 there will be two increases in MIP.

“After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante. “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount. The UFMIP will be increased from 1.00 percent to 1.75 percent of the base loan amount. UFMIP Fee is paid once and is typically financed by adding it to the loan amount although it may also be paid in cash by the buyer or seller.

Take a look at the breakdown below:

* 15-year loan terms with loan-to-value over 90% : 0.60 percent annual MIP (up from 0.50 percent)
* 15-year loan terms with loan-t0-value under 90% : 0.35 percent annual MIP (up from 0.25 percent)
* 30-year loan terms with loan-to-value over 95% : 1.25 percent annual MIP (up from 1.15 percent)
* 30-year loan terms with loan-to-value under 95% : 1.20 percent annual MIP (up from 1.10 percent)

All new FHA loans are subject to the increase — purchases and refinances! Avoid paying the new FHA mortgage insurance premiums by starting your FHA mortgage application today!

If you live in the Denver area and are looking for a reputable lender give Ann Meadows a call for a referral at 888-860-1931.