The HUD department certainly has been busy over the past couple of years with many underwriting guideline changes, as well as changes to the FHA Upfront Mortgage Insurance Premium (UFMIP) and monthly mortgage insurance (MI). The next change will occur on April 18, 2011, and applies to the monthly mortgage insurance percentage rates.
· Currently for FHA loans with a term over 15-Years with a loan-to-value ratio that is Under 95 percent, the monthly MI is .85 percent, which will change to 1.10 percent in April.
· For FHA loans with a term over 15-Years with a loan-to-value ratio that is Over 95 percent, the monthly MI is currently at .90 percent, which will change to 1.15 percent in April.
· For FHA loans with a 15 Year term or lower with a loan-to-value ratio that is Under 90 percent, there is no monthly MI requirement. That will change to a MI percentage of .25 percent in April.
· For FHA loans with a 15 Year term or lower with a loan-to-value ratio that is Over 90 percent, the current MI percentage is .25 percent. That will change to a MI percentage of .50 percent in April.
The current FHA UFMIP will not change from the current 1.0 percent.
How long will you have monthly MI with an FHA mortgage?
FHA monthly mortgage insurance will be required for a minimum of 5 years and will drop off your payment once your loan-to-value ratio falls to 78 percent through repayment of the loan.
FHA rates are still in a great range, so now might be a good time to get moving if you’re considering an FHA refinance. Get the rates while they are still near historic lows and miss-out on the monthly mortgage insurance increase, which goes into effect on April 18, 2011. Your loan doesn’t need to close by then, all you need is to have your FHA case number assigned by then.
If you are considering a home mortgage refinance now and need some help, have questions, or need some competitive refinance rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.
May the Mortgage Refinance Rates be with You!
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