Articles Tagged With: FHA MIP

February 13, 2013

FHA HECM Loan Changes: When and How

On January 30, FHA issued guidance about pending changes to the FHA Home Equity Conversion Mortgage or HECM loan program. The changes affect all FHA HECM loans for fixed rate mortgages with case numbers assigned on or April 1, 2013. According to the FHA official site, “To help sustain the HECM program as a viable financial resource for aging homeowners and to strengthen the Mutual Mortgage Insurance Fund, the HECM Saver will be the only initial MIP option available to mortgagors who seek the predictability of a fixed interest rate mortgage and lower upfront closing costs.” This, according to FHA Mortgagee Letter 2013-01, requires the lender to “designate HECM Saver as the initial MIP and use the HECM Saver principal limit factors to determine the amount of funds available to | more...

May 29, 2012

Up Front Mortgage Insurance Payments For FHA Home Loans

By Joe Wallace

A reader asks, “Can I roll my upfront MIP on to my loan above the county loan limits? The limit in San Diego is $697500, can I roll the upfront MIP on to the loan or do I have to pay cash?” Up front mortgage insurance payments, or UFMIP, have clearly defined rules as spelled out in HUD 4155.2. According to the rules, “The UFMIP remittance period begins on the date of loan settlement or the date of disbursement of the mortgage proceeds, whichever is later. UFMIP must be paid to FHA in a lump sum within 10 calendar days after the loan is closed.” That lump sum can be paid in cash or rolled into the loan amount, but the borrower cannot split the two options and pay a | 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...

March 14, 2012

FHA Mortgage Insurance Changes For Loans Above $625,500

By Joe Wallace

Recently we wrote about an FHA/HUD policy changed announced by President Obama that would lower FHA costs for borrowers applying for FHA streamline refinancing loans. An FHA/HUD press release (HUD 12-045) states, “Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to FHA

January 2, 2012

Reader Question: FHA Up Front Mortgage Insurance Premiums

By Joe Wallace

A reader question about FHA mortgage insurance premiums came in over the weekend, asking about how the FHA calculates MIP. The reader asks, “Is there some way to calculate how much the FHA insurance will cost based on the price of the home?” The technical answer to this question is that there’s no way to base the FHA Mortgage Insurance Premium on the price of the home alone–the loan amount (more specifically, the loan-to-value percentage) is used to determine the MIP, and the loan amount could include other items such as permissible closing costs, etc. That aside, when it comes to how to calculate the MIP, there’s more than one answer because of the nature of FHA mortgage insurance premiums. The FHA loan Up Front Mortgage Insurance Premium, or UPMIP, | 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...