FHA loans have been the go-to loan for years: Low down-payment requirement, interest rates were generally pretty low, no appraisals needed for refi’s. With as many defaults as there have been over the past few years, even FHA got themselves in financial hot water. New regulations seek to rectify the problem: in 2012 FHA mortgage insurance was already raised in 2012. However, this apparently was not enough.
Most drastic changes in mortgage insurance for FHA loans:
- On an FHA case number pulled (you applied for the loan and received a FHA case number) after 4/1/2013 mortgage insurance will increase from 1.25% to 1.35%
- On an FHA case number pulled after 6/3/2013 the monthly mortgage insurance will remain part of the payment for the entire term of the loan. F-O-R-E-V-E-R.
As of now, homeowners can cancel their FHA mortgage insurance as soon as their FHA loan reaches 78 percent of the original balance.
Starting in June, FHA loans with loan-to-value of less than 90% mortgage insurance must be paid for 11 years. FHA loans with a higher LTV (Loan to Value= the loan is 90% or higher than the appraised value) will keep this MIP (Mortgage insurance premium) for the life of the loan!!
Call me and we can talk about it: Susanna Haynie 719-321-0800
I’ll be happy to send you a list of mortgage professionals that will do anything they can to get you the best loan for the best price out there.