Changes To FHA Mortgage Insurance Premiums

Effective April 18, 2011, mortgage insurance premiums will increase for 30-year FHA mortgages assigned a FHA case number on or after April 18, 2011:

Loan to Value Down Payment Old Annual Premium % New Annual Premium %
96.5%-95.01% 3.5% – 4.99% .90% 1.15%
95% or less 5% or more .85% 1.10%

Effective April 18, 2011, mortgage insurance premiums will increase for 15-year FHA mortgages assigned a FHA case number on or after April 18, 2011:

Loan to Value Down Payment Old Annual Premium % New Annual Premium %
96.5%-90.01% 3.5% – 9.99% .25% .5%
90% or less 10% or more None .25%

The upfront mortgage insurance premium is not affected and will remain 1%.

 

What does this mean to you?

If you are buying a home for $200,000 and are making a down payment of 3.5% ($7,000), the monthly mortgage insurance premium will be:

$200,000 – $7,000 = $193,000 x .0115 = $2,219.50/12 = $184.96 per month.

Prior to this change, the monthly mortgage insurance premium would have been:

$200,000 – $7,000 = $193,000 x .009 = $1737.00/12 = $144.75 per month.

The new FHA monthly mortgage insurance premium will increase a buyer’s mortgage payment by $40.21.

Although the Mutual Mortgage Insurance Fund (MMIF) is financially sound, HUD was under a legislative mandate to further strengthen MMIF to make sure FHA could continue its mission of helping borrowers with low down payments during these challenging economic times.

If you are interested in purchasing a home or a condominium or have any questions about the home buying process, please feel free to contact me either by email at mhagan@prudentialct.com or on my cell 860-305-8044.

Maria Hagan

Hartford CT Real Estate Agent
East Hartford CT Real Estate Agent
Wethersfield CT Real Estate Agent
Rocky Hill CT Real Estate Agent
Homes for Sale in Greater Hartford CT

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