Are you a homebuyer who has got approval for FHA
home loans? If yes, then you should know that you are required to keep mortgage
insurance with you. This will consist of both an Up front Mortgage Insurance
payment (UFMIP) and a Mortgage Insurance Premium (MIP). The Upfront Mortgage
Insurance Premium payment goes into an escrow account that has been established
by the U.S. Treasury Department. These funds are used for securing the government
if, by chance, the borrower makes a default on the FHA loan. If required, you
may seek help of hunter financial group to take out a FHA loan.
Earlier, the UFMIP on some FHA loans was very
less like 1.5 percent. However, with effect from April 5, 2010, the FHA has new
amounts for UFMIP on many customary and refinancing loans from the FHA.
You need to know that all affected FHA loans with case numbers dispensed after April 5, 2010 will acquire 2.25 percent of an Upfront Mortgage Insurance premium. This change indicates an increase in premium for the individuals who want to buy money loans, in addition to existing FHA mortgage holders who are interested in refinancing. The increase has an influence on FHA-to-FHA and “non-credit qualifying” refinancing.
The FHA does not affect any change in the annual premiums, the newest policy information from the FHA says for customary and refinance loans, the annual premium will be paid on a monthly basis and will be charged as per the length of the FHA loan and loan-to-value ratio. Check out with your loan officer for payment plan information for your particular FHA home mortgage loan. You need to know that FHA loans are mostly affected by the new 2.5 percent UFMIP, but there are some exclusions too.
HECM, TITLE 1
and hope for homeowners – The increase in UFMIP does not affect Home
Equity Conversion Mortgages, also known as HECM loans or Title I mortgages.
Hope for homeowners loans are also not affected by the increase in UFMIP.
Other kinds of
loans – If
you have a Section 248 (Indian Reservations), a Section 247 (Hawaiian
Homelands), your loan will remain unaffected by the change in the UFMIP.
Section 223(e) (declining neighborhoods) and Section 238(c) (Military Impact
areas in New York ad Georgia) are also not affected in anyway.
Up Front
Mortgage Insurance Premium – How do they work?
FHA loan charges an insurance premium up front,
which is equivalent to a percentage of your mortgage loan. In case of full
credit qualifying refinance FHA loans, the amount will be 2.25 percent. FHA
Streamline refinance loans also charge a UFMIP of 2.25 percent.
HOPE for Homeowners also pay 2.0 percent and Home Equity Conversion Mortgages pay 2.0 percent as per the new rules.
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