Changes To FHA Guidelines
Changes To FHA Guidelines Taking Effect Soon:
For those folks who are thinking about purchasing a new home this year or are thinking about refinancing their current homes, they need to realize that financing via changes in FHA guidelines will cost more to get a FHA Loan. FHA has announced changes to the FHA mortgage insurance premium that home owners will be charged on their home loans. Getting a FHA mortgage loan will be more expensive than ever before. Another major setback for FHA mortgage loan applicants is that they might be obligated to pay FHA mortgage insurance for the life of the FHA mortgage loan.
Changes To FHA Guidelines: FHA Mortgage Insurance Premium
Below is the new FHA mortgage insurance premium charts that explains the upcoming changes to FHA guidelines that compares previous mortgage insurance premiums and the new mortgage insurance premiums. The new FHA mortgage insurance premium guidelines goes into effect for all new mortgage loan applications originated on or after April 1, 2013.
If you currently have a 15 year fixed rate FHA insured mortgage home loan with a Loan to Value of 78% or better, you do not have to pay FHA mortgage insurance anymore. This is a major savings for those borrowers who currently have a FHA mortgage loan because the FHA insurance premiums are 1.25% of the mortgage amount. The 78% Loan to Value mortgage insurance exemption will be changing as well begining on June 3, 2013.
Can FHA Mortgage Insurance Premiums Be Cancelled?
- For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation (excluding financed Up-Front MIP (UFMIP)) less than or equal to 90 percent LTV, the annual MIP will have to be paid until the end of the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.
- For any mortgage involving an original principal obligation (excluding financed UFMIP) with an LTV greater than 90 percent, FHA annual MIP will have to be paid until the end of the mortgage term or for the first 30 years of the term, whichever occurs first.
For those home buyers whose goal is to buy a house this year, they need to take into account the above changes to FHA lending guidelines.
Update On Changes To FHA Guidelines With Mortgage Insurance Premium
FHA Mortgage Lending Guidelines has been updated as of January 26, 2015 with regards to FHA mortgage insurance premium. FHA Mortgage Insurance Premium got reduced to 0.85% from 1.35% for the FHA annual mortgage insurance premium.