HUD’s Valentine’s Day Present: Another MI premium increase

15 02 2011

HUD’s Mortgagee Letter, released on Valentine’s Day, outlines the new changes that will be affecting all FHA borrowers starting April 18th, 2011.  The MIP annual premium, commonly called “monthly mortgage insurance”, will be increasing from 85 and 90 bps respectively to 110 and 115 bps.  This means that for a couple buying a $175K home with a 30 year FHA mortgage, their monthly payment will go up $33 per month. 

Click on the link HERE for a report showing how much this change will cost you monthly and over time. 

The monthly MI for 15 year FHA loans will also double on April 18th. 

The only way to avoid the MI increase on an FHA loan is to go under contract and have the FHA case number reserved before April 18th, 2011.  This is one instance where your time does equal your money. 

If you need financing designed to save you money or you need a solid realtor who understands the importance of this new FHA change, please reach out to me. 

And I hope that you received a better present yesterday than HUD’s Valentine’s Day “present.”

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2 responses

15 02 2011
nataliebratton

Wow, that hurts! At least the interest rates are still pretty low…for now.

15 02 2011
wilhelmkoenig

Yeah, but notice it doesn’t affect Indian loans. : >

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