FHA Mortgage Insurance Increases April 1, 2012
Monthly mortgage insurance will be increasing on all applications on or after April 1, 2012:
FHA held a briefing this morning on the President’s 2013 budget. On this call, they reiterated the upcoming single family premium changes for FHA loans which is outlined in the chart below. The upfront premium of 100 bps has not changed. The mortgagee letter is expected March 1, 2012, with an effective date of April 1, 2012. Importantly, these changes are only the first of additional changes expected to be announced within the next few weeks. Although they could not elaborate, the industry should expect additional changes to the premium structure, likely a small increase to the UFMIP. Finally, we expect an announcement of lower premiums for streamlined refinances as a means to help more families refinance without the benefit to borrower impacts.
The increase will be 10 basis points taking the new monthly premium to 115 bps from 125 bps on loans over 95% Loan To Value. This applies to loans greater than 15 years.
Loan less than 95% Loan To Value will increase from 110 bps to 120 bps.