- 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.”
What this means is if a borrower takes out a 30-year, $500,000 loan and makes the FHA’s mandatory 3.5% minimum down payment, they will be responsible for a 1.35% mortgage insurance premium versus the 1.25% rate of today. That equates to about $562 per month in mortgage insurance for the buyer in this example versus the approximately $520 they would pay today.
June 3: Additionally, starting June 3, an FHA borrower must carry mortgage insurance for the life of their loan. This is a big change from today’s rules where borrowers can drop the premium once their loan balance reaches 78% of the original loan amount. Other June changes involve a mandatory manual underwriting by the lender to evaluate the borrower’s qualifications for applicants with a credit score below 620 and a total debt-to-income ratio of over 43%.
For assistance with all of your Phoenix real estate needs, please contact me. I’m a local real estate agent who would love to show you around.