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Delaware FHA Loans – MIP Changes October 4, 2010

John Thomas September 29, 2010 Tags: , ,

It is official: FHA was given authority on September 3, 2010 to change the amount charged to borrowers for both the Up Front Mortgage Insurance Premium and the Annual Mortgage Insurance premiums…and change them they did.

This will impact how you write up a Delaware FHA purchase agreement, as well as any monthly payments you might estimate

The new premium amounts will be effective on all FHA case numbers assigned on or after October 4, 2010 – so if you already have an Delaware FHA transaction in process, you won’t be impacted as long as your loan officer has already pulled an FHA case number, but new FHA clients who come into process on or after October 4th will be subject to the new guidelines.

The new guidelines affect both Refinances and Purchases.  So if you are purchasing or refinancing a home in Delaware you might want to contact me now so that we can get your FHA case # assigned because the changes on October 4th will make the same loan cost you more per month.

Here’s what you need to know:

  • The Up Front Mortgage Insurance premium is now 1.0 % for all standard FHA programs, including on purchase money mortgages. This is a significant change from the 2.25% Up Front Mortgage Insurance typically in place on FHA 30 year Fixed Rate transactions.
  • …but don’t break out the party hats just yet – the Annual Mortgage Insurance premium is now .90% for LTV’s greater than 95% on 30 year loans…and this is also a significant change from the .55% we’ve been accustomed to using when we calculate the monthly payment.
  • There are different annual premium amounts for lower loan to values and for 15 year terms, so call me for more details if needed. And by the way, FHA now has the authority to raise the Annual Mortgage Insurance premium “at will”…up to 1.55%…so I’ll be keeping closely tuned to any changes and will be sure to keep you informed.

And if you have any other questions about how these changes will impact your clients, call or email me anytime. I’m always happy to review your clients’ situations, and help them secure the home of their dreams.

APPLY ONLINE today to be pre-approved for a mortgage to buy your first home in Delaware.

John R. Thomas – Certified Mortgage Planner – FHA, VA & USDA Specialist

Primary Residential Mortgage, Inc. 302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713
www.PRMIDelaware.com

About John Thomas

John Thomas and his team are long-time Delaware natives. They know the local real estate market as well as they know the loan products that help them serve it. Dedicated to helping first-time buyers; the John Thomas Team are experts on first-time buyer loan programs (FHA, VA, USDA) and conduct monthly first-time buyer seminars that have been attended by more than 3000 Delaware buyers.

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