Clearwater / Tampa Bay home buyers we heard it was coming but now we know it for sure - after October 3rd mortgage insurance IS changing for FHA loans and will cost your MORE...so if you've got your eye on a home and plan to finance via FHA this might be a reason to do it sooner rather than later...
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.
FYI in regards to Charlie Ragonesi's comment, #4 - I still don't think that this will move buyers from FHA loans to conventional loanss. 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.
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
Cyndee... 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
Thanks Jeff - it's great having you get the latest FHA info out there! Appreciate your making it all make sense :)
FHA loan is are the easiest type of real estate mortgage loan to qualify for..
Great reblog Cyndee. Keeping your consumers updated to the latest news about FHA homes only shows how dedicated you are to your profession and as Clearwater Beach Short Sale Agents. Keep up the good work and thank you for sharing this!
Thanks for reblogging this Cyndee. With your expertise as Clearwater Beach Short Sale Agents, buyers and sellers in your area only need to read your blog to be updated with the real estate issues in Clearwater Beach.