FHA MIP COMMING OCTOBER 4TH 2010
Monday, September 20, 2010
The News
FHA has announced that effective with all files assigned on or after 10/4/2010, FHA will be lowering the upfront MIP from 2.25% to 1.000%, while increasing the annual (monthly) MIP on loan terms longer that 15 years. The monthly increase will be from .50 - .55 to .85 - .90 and will be based on LTV.
The Commentary
The overall effect of these changes are that your client who chooses a 30 year fixed rate mortgage will end up paying slightly more than what they would if they originated their loan before the deadline date. The upside is that their up-front MIP will decline and start out with more equity in their home. Note that FHA has the option to increase the monthly MIP by another 30% AT THEIR DISCRETION.
