FHA has announced that After Sept 6, 2010 they will be changing the way FHA's MIP (Mortgage Insurance Premium) will be collected. Presently, FHA collects 2.25% of the Loan Amount upfront and can be financed, After that a monthly premium of .50% or .55% (Based upon the LTV) is collected on a monthly basis. Effective Sept 6, 2010 the upfront premium will be lowered to 1.00% however the Monthly premium will increase to .85% or .90% (Based upon the LTV).
With every change there is good and bad. For homeowners or home buyers planning on keeping a mortgage greater than 4 years the current Mortgage Insurance Structure is better. With the New Mortgage Insurance structure homeowners or home buyers can expect their monthly payment to increase about 3%.
In another post I will be promoting borrowers with a Current rate above 5.50% to research the use of a FHA RATE AND TERM STREAMLINE REFINANCE. In that post, I will explain how some home owners can refinance their current home WITHOUT AN APPRAISAL and without NO money out of Pocket.