The monthly mortgage insurance premium for Delaware FHA loans will increase by 0.25% on all FHA case numbers pulled on or after April 18, 2011.Â So if you are under contract to purchase a home in Delaware and are using an FHA loan then you need to make sure your loan officer pulls your FHA case number by Friday April 15, 2011 or if you are considering an FHA refinance then you should call to get your FHA case number pulled before the end of the day on Friday April 15, 2011.Â If you need help please feel free to call 302-703-0727.
It is official: FHA was given authority onÂ September 3, 2010Â to change the amount charged to borrowers for both the Up Front Mortgage Insurance PremiumÂ and the Annual Mortgage Insurance premiums…and change them they did.
This will impact how you write upÂ 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 â€“ 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.
FHA Loans – FHA Mortgage Insurance
FHA does not fund home loans directly; rather, it provides a guarantee to the mortgage lender against default. There are two separate fees that HUD collects to provide a level of guarantee coverage to the lender:
- Up-front mortgage insurance premiums (UFMIP).
- Monthly renewal mortgage insurance (Monthly MI).
The up-front mortgage insurance premium, if required, will be 1.75% of the base loan amount. This can be added directly on top of the base loan amount to determine the total loan amount, regardless of initial loan amount or appraised value. MI can always be added to the maximum base mortgage amount.
Monthly mortgage insurance premiums for home loans closed after January 1, 2001, are refundable through the 5th year of the loan based on certain percentage increments. For example, if a borrower sells or refinances after having the property or the loan for 36 months, the borrower is entitled to a partial refund of the original FHA up-front mortgage insurance premiums.
The annual renewal premium, also referred to as the mutual mortgage insurance premium in the HUD mortgage insurance premium policy, is 0.85% per year divided by 12. This is included in the borrower’s monthly payment.