Articles Tagged With: APR (Annual Percentage Rate)

April 27, 2012

FHA Loans: The Road To Refinance

The official White House You Tube channel posted a video on April 18th, 2012, detailing the President’s plan for refinancing for borrowers. According to the YouTube post, “Brian Deese, Deputy Director of the National Economic Council, explains how President Obama’s plan would make it much easier for millions of American homeowners to refinance their mortgage and save hundreds of dollars every month.” This plan has been proposed, but has not been passed by Congress. As described in the video (see below at the end of this blog post), there are many advantages to refinancing, and the Obama plan would, if passed, offer more options for borrowers who need lower monthly payments and lower interest rates. But in the meantime, many FHA borrowers need refinancing and can’t afford to wait to | more...

March 14, 2012

FHA Annual Mortgage Insurance Premium Changes

By Joe Wallace

When the FHA and HUD recently announced a reduction in mortgage insurance premiums for streamline refinancing loans, there was also a reminder of a pending increase to other mortgage insurance premiums. In late 2011, an act was signed into law which results in an increase in annual FHA mortgage insurance premiums for non-streamline FHA loans. According to FHA Mortgagee Letter 12-4, “On December 23, 2011, the President signed into law the Temporary Payroll Tax Cut Continuation Act of 2011 (Public Law 112-78), which requires FHA to increase the Annual MIP it collects by 10 basis points”. This change is for FHA loans with case numbers assigned on or after April 9, 2012. Borrowers who get FHA loan case numbers before this date would pay the mortgage insurance premiums current for | more...

November 15, 2011

FHA Cash-Out Refinancing Maximum Loan Amounts

By Joe Wallace

A recent reader question came in asking about FHA loan maximum amounts for cash-out refinancing loans–we thought it might be a good time to examine the rules for those maximums. In general, FHA loans have a specific loan-to-value limit. According to FHA.gov, “Effective for case number assignments on or after April 1, 2009, the loan-to-value (LTV) of any cash-out refinance to be insured by FHA may not exceed 85% of the appraiser

October 3, 2011

FHA Mortgage Insurance Premiums

By Joe Wallace

Earlier in 2011 we reported a change to FHA Mortgage Insurance Premiums–according to FHA Mortgagee Letter 11-10, a scheduled increase in Annual Mortgage Insurance Premiums took effect for all FHA loan case numbers dated on or after April 18th 2011. The change was an increase in the annual premium for FHA loan terms of: –Greater than 15 years–Equal to or less than 15 years For FHA mortgage loans with greater than 15 year terms, the new MIP amount depends on the down payment. If the down payment is equal to or greater than 5%, the new Annual Premium is 110 basis points (bps). If the down payment is less than 5%, the new Annual Premium is 115 basis points (bps). FHA instructions for loans equal to or less than 15 | more...

September 29, 2011

FHA Loan Questions: What Is The Maximum For An FHA Streamline Refinance Loan?

By Joe Wallace

FHA rules for Streamline Refinancing Loans changed in 2011, and there are updated guidelines borrowers and lenders need to know when trying to determine what the maximum loan amount might be for a particular borrower. Under the old rules (for cases assigned before April 18, 2011) there were two sets of guidelines. One set was for FHA streamline refinancing without an appraisal. For these loans, the old system allowed refinancing maximums that did not exceed the principal outstanding balance, minus any up front mortgage insurance premium refund, plus the amount of the new up front mortgage insurance premium (UFMIP). The old FHA streamline limits also included a “with appraisal” maximum which was based on the lower of the outstanding principal balance minus any UFMIP refund, plus closing costs and prepaid | more...

September 27, 2011

FHA Clarifies Rules on Annual Mortgage Insurance Premiums For Loans 15 Years Or Less

By Joe Wallace

The FHA has issued clarification on FHA insured mortgages with terms of 15 years or less and a Loan To Value Ratio of less than 78 percent or less. FHA loans with case numbers assigned on or after April 18, 2011 are affected by this clarification, which refers to the cancellation of the annual mortgage insurance premium or MIP. Earlier in 2011, the FHA issued Mortgagee Letter 2011-10 which clarified and updated FHA loan rules for MIP for affected FHA loan types. When it was issued, it did not address “forward” loans with terms 15 years or less as described above. According to the FHA, “Currently the annual MIP is canceled for mortgages with amortization terms of 15 years or less when the LTV reaches 78 percent.” FHA Mortgagee Letter | more...