FHA issued a new Mortgagee Letter yesterday which increased the monthly mortgage insurance by 10 basis points effective with case numbers issued on or after April 1, 2013 (along with a few other things).
Here is a quick summary…
Consistent with FHA’s ongoing efforts to strengthen the Mutual Mortgage Insurance Fund, FHA is
- Revising the period for assessing the annual MIP
- Removing the exemption from the annual MIP for loans with terms of 15 years or less and Loan to Value (LTV) ratios of less than or equal to 78 percent at origination
- And increasing the annual MIP on all forward mortgages except single family forward streamline refinance transactions that refinance existing FHA loans that were endorsed on or before May 31, 2009
The revision to the period for assessing annual MIP and the removal of the exemption for annual MIP are effective for case numbers assigned on or after June 3, 2013. The increase to the annual MIP is effective for case numbers assigned on or after April 1, 2013
What does this mean for our clients????
For a client buying a $250,000 home, the mortgage insurance increase will increase their payment by about $20/month.