Jeff's Post correct some miss information that is circulating about the proposed change in FHA's MIP Premiums. Besides individualsconsidering a home purchase, current Ohio home owners considering refinancing using a FHA Loan or a FHA Streamline, the dates and the higher Monthly MIP should be considered. Interest rates are great right now and It is my opinion that if it makes financial sense to refinance your mortgage now is a great time to do it. FHA has a Streamline Refinance that can allow even homeowners that purchased their home during the housing peak to refinance to a super low rate even if their equity position is negative. What the future holds with interest rates is anyone guess, but if interest rates rise the option of allowing someone to assume a low rate of 4.00% - 4.25% could make your home attractive to potential buyers. In Ohio, give me a call otherwise give a call to one of the other mortgage professionals on ActiveRain.
The President officially signed Bill H.R. 5981 on August 11th, 2010 which became public law. I wrote about the actual changes to FHA loans and how it will affect borrowers as of October 4th, 2010. Please read : Bill H.R. 5981 passes - FHA Mortgages to increase it's annual mortgage insurance premium
There has been a main problem in regards to the information being supplied since this bill was passed by the Senate, which was on August 4th, 2010. I have read several blogs out on the internet both by AR members and the news media stating that the monthly mortgage increase has been raised to 1.55 basis points. This is correct and incorrect. Read below...
The following summary below was written by the Congressional Research Service.
Yes, congress passed the monthly mortgage insurance to 1.55 basis points. But this is a cap and not the actual amount that FHA is prepared to use on all FHA loans for now. The new monthly mortgage insurance rates will be either .85 or .90 basis points, all depending on the amount of your down payment., which I explained in this post. FHA Mortgages monthly mortgage insurance changes - effective October 4th, 2010 -
But if you read some of these other posts, they don't explain it this way. Some give examples of the mortgage payments of like $167 more a month on a $200,000 mortgage, which is based on 1.55 basis points. If you actually use .90 basis points, that mortgage payment now increases only to $59 more a month. Sorry folks, but that is a huge and misleading difference of $108 a month and could scare possible buyers away if not properly educated about this new change for FHA loans.
Keep in mind though, FHA will not need the approval from Congress to ever change these rates as long as they don't exceed 1.55%.
Another thing, HUD has not released a FHA mortgagee letter as of yet. But FHA did announce this as a press release with a FHA letter. FHA Mortgages - change in mortgage insurance Any and all FHA case numbers assigned on and or after October 4th, 2010 will be subject to these new changes.
3 quick examples :(both examples are putting the minimum down payment of 3.5%)
- On a $275,000 mortgage - the change in payment would be about $70 higher a month
- On a $200,000 mortgage - the change in payment would be about $45 higher a month
- On a $125,000 mortgage - the change in payment would be about $27 higher a month
These FHA Loan changes are the same, no matter what state you reside in.
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For more information on FHA loans, please go to this link. The FHA Expert
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors
Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc
Tim Bradford
Ohio Mortgage Banker LO.007173.000/ NMLS 250013
Cell: 216.324.8113 Anytime
www.GetAMortgageNow.com or www.Go2Apply.com
www.OhioHomePath.com or www.OhioRuralHomeLoans.com
Serving the Ohio Realtors and Home Buyers and Home Owners
Jeff, Thanks for the post to correct some of the miss information that consumers will find on the internet. I have reblogged for potential home buyers and individuals considering refinancing. As you know this is important to both groups.
We used to call my older sister Miss Information. When we would be traveling and see an information booth we would laugh and laugh....
I will have to read your Re-Blog or Jeff's post to make sure I have not believed some of the misinformation. Thanks for Re-Blogging and catching my eye.
Thanks
for sharing this
Maureen, Thanks for the comment and the funny, MISS INFORMATION. LOL
Richard, Spread the word within your market.
Sometimes I wish ActiveRain had a button to flag for Miss Information or obsolete information. I believe we all know that the search engines index everything. The good, the Bad and the different.
Tim.. thanks for reblogging this post and for helping getting this correct information out there. Again, thanks