The following changes to FHA Mortgage Insurance Premiums (MIP) will take effect with the respective case number assignment dates, April 1, 2013 and June 3rd, 2013. These changes are big and may affect borrowers affordability or ability to qualify for FHA Financing.
Example on how this increase will affect our customers (using the same estimated rate, taxes and insurance):
Before the change:
Loan Amount = $200,000 with 3.5% down on a 30 year term and 1.25% annual MIP factor = Monthly MI of $201.04 and an estimated total monthly payment of $1567 (PITI)
After the change:
Loan Amount = $200,000 with 3.5% down on a 30 year term and 1.35% annual MIP factor = Monthly MI of $217.13 and an estimated total monthly payment of $1583 (PITI)To keep the payment equivalent to the payment prior to the change the borrower would need to reduce the sales price by $3000.
Another change is that currently if you take a 15-year fixed (or shorter) and are putting down 22% then there is NO annual MIP
… but on 6/3/13 there will be a .45% annual MIP (on a $200k mortgage that would be $900/year, or $75/mo), see below.
The annual MIP is calculated on the base loan amount, not total loan amount
*The upfront mortgage insurance premium (UFMIP) will not change. It is 1.75% of the base loan amount.