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April 1st, HUD changes Mortgage Insurance Premiums And Increases The Annual Premium

How does this effect you - We need to get together and review your situation, show you our 47 Step Home Discovery and Acquisition Method and VIP Buyer Program and get you into your home asap to help you save thousands of dollars. 

 

On January 31, 2013 the U.S. Department of Housing and Urban Development (HUD) released Mortgagee Letter 2013-04.  

 

The Revision of Federal Housing Administration (FHA) policies concerning cancellation of the annual Mortgage Insurance Premium (MIP) and increase to the annual MIP.

 

Effective Dates:

 

The section of this ML that increases the annual MIP is effective for case numbers assigned on or after April 1, 2013, except as noted below. 

 

The following sections of this ML are effective for all mortgages with FHA case numbers assigned on or after June 3, 2013:

 

  • Revision to the period for assessing the annual MIP;
  • Removal of the exemption from the annual MIP for loans with terms of 15 years or less and LTVs of less than or equal to 78 percent at origination;
  • Increase in the annual MIP for mortgages with terms less than or equal to 15 years and LTV ratios less than or equal to 78 percent at origination.

 

Revision to the Period for Assessing Annual MIP:

The table below shows the previous and the new duration of annual MIP by amortization term and LTV ratio at origination.

 

TERM

LTV (%)

PREVIOUS

NEW

< 15 Year Term

< 78%

No annual MIP

11 Years

< 15 Year Term

> 78 – 90.00%

Cancelled at 78% LTV

11 Years

< 15 Year Term

> 90.00%

Cancelled at 78% LTV

Loan Term

> 15 Year Term

< 78%

5 years

11 Years

> 15 Year Term

> 78 – 90.00%

Cancelled at 78% LTV & 5 Years

11 Years

> 15 Year Term

> 90.00%

Cancelled at 78% LTV & 5 Years

Loan Term

 

Increase to Annual Mortgage Insurance Premium:

 

The first table shows the previous and the new annual MIP rates by amortization term, base loan amount and LTV ratio. All MIPs in this table are effective for case numbers assigned on or after April 1, 2013.

 

Term > 15 Years

Base Loan Amount

LTV

PREVIOUS MIP

NEW MIP

< $625,000

< 95.00%

120 BPS

130 BPS (10 BPS Increase)

< $625,000

> 95.00%

125 BPS

135 BPS (10 BPS Increase)

> $625,000

< 95.00%

145 BPS

150 BPS (5 BPS Increase)

> $625,000

> 95.00%

150 BPS

155 BPS (5 BPS Increase)

Term < 15 Years

< $625,000

78.01 – 90.00%

35 BPS

45 BPS (10 BPS Increase)

< $625,000

> 95.00%

60 BPS

70 BPS (10 BPS Increase)

> $625,000

78.01 – 90.00%

60 BPS

70 BPS (5 BPS Increase)

> $625,000

> 90.00%

85 BPS

95 BPS (5 BPS Increase)

 

The second table shows the previous and the new effective annual MIP rates for loans with an LTV of less than or equal to 78 percent and with terms of up to 15 years. The new annual MIP for these loans is effective for case numbers assigned on or after June 3, 2013.

 

Term < 15 Years

Base Loan Amount

LTV

PREVIOUS MIP

NEW MIP

ANY AMOUNT

< 78.00%

0 BPS

45 BPS (45 BPS Increase)

 

Exceptions to Announce MIP Increases:

The increases in the annual MIP specified in this ML apply to all mortgages insured under FHA’s Single Family Mortgage Insurance Programs except:

  • Streamline refinance transactions of existing FHA loans that were endorsed on or before May 31, 2009 (see ML 2012-04)
  • Title I
  • Home Equity Conversion Mortgages (HECM)
  • Section 247 (Hawaiian Homelands)
  • Section 248 (Indian Reservations)

 

Call Curtis Johnson Realty now (480) 355-4000 and we can get you representation on your home purchase.

 



Posted on: Friday 22nd of February 2013
Written by: James Wilson

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