The first of a series of expected mortgagee letters from FHA on their implementation of the new Housing Law came out this afternoon.
FHA has announced the new upfront and monthly mortgage insurance premiums that will replace the existing premiums that were tiered based on credit risk.
The new premiums are the same for all credit levels, but they are higher than the premiums used to be before the tiered MI pricing went into effect on July 14.
Confusing isn't it.
The new upfront mortgage insurance premium is 1.75% for purchase money and all full credit qualifying loans.
For streamline refinance loans (FHA refinance of an FHA loan) the new upfront mortgage insurance premium will be 1.5%.
For FHA Secure the new upfront mortgage insurance premium will be 3%.
Monthly mortgage insurance premiums for 30 year loans will be based on .5% annually for loan to values equal to or under 95% and .55% annually for loan to values over 95%.
These premiums are actually lower than I had feared, so they seem like good news to me.
Here is the announcement for the new premiums.
The determining date for which mortgage insurance premiums are in effect is the case number order date. The new premiums will be used for case numbers ordered on or after October 1, 2008.
This is the first FHA announcement that I have seen. More are expected soon to address implementation guidelines for the other significant changes brought about in the housing law that was signed July 30.
Richard Smith
American Acceptance Mortgage, Inc
Toll Free 888-474-9920 Cell 423-280-0345
Home financing in Tennessee, Georgia, and Alabama.
Experience matters when it is your home loan.
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Mortgage lending offices located in Chattanooga, TN
rsmith@aamonline.com
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OK, now I am really confused. It says there is a moratorium on the risk based MI for a year from Aug 2008 to Aug 2009 and then it says what they are doing to raise it during that same time period based on risk????? Only a bureaucrat could have possibly written this.
yes, that is great news....I feared it would be much worse!
Fred,
I love your comment. The logic and the implementation are confusing.
When HUD read the new Housing Bill they immediately announced that they intended to increase the premiums accross the board. Here is a post that refers to the HUD press release.
I actually expected something over 2%.
Richard
OK Richard, I just read it again (5th time) and I am more confused than when I started. Why can't they write these things in English or Spanish or ancient Greek.
Fred,
It does not get better by reading it over. My recommendation is for you not to continue reading it as it might be hazardous. :)
You are so right about the beaurocrats, and they are in charge. Cannot discuss anything with them. They do not want to hear.
BTW, I actually do struggle through ancient Greek - self taught. I spent last year working to learn Spanish. It is just so hard to keep current on many different things.
Thanks,
Richard
Well not matter what launguage its in its hard to understand.