We've been talking about FHA financing and that more and more buyers, especially first time buyers, are able to use this government financing program to buy their Pasadena home.
Yesterday, HUD (Department of Housing and Urban Development) has announced their intention to lower the Up Front MIP from 2.25% to 1% AND ( GOOD NEWS) and
Increase the Annual (monthly) MIP (Mortgage Insurance Premium) from .50 - .55% to .85 - .90% depending on LTV (BAD NEWS) on loan terms greater than 15 years.
This is scheduled to be effective for case numbers issued starting September 7, 2010 - pending being signed by our president.
The results of this FHA change is:
Assuming
$100,000 base loan
Loan Amount with Financed MIP
$101,000 using the new MIP in the mortgage amount
$102,250 using the old MIP in the mortgage amount
Annual MIP (Paid monthly on top of mortgage payment)
$909.00 ($75.75 Monthly) New Annual MIP based on $101,000
$562.38 ($46.86 Monthly) Old Annual MIP based on $102,250
At 5% 30 years assuming 96.5% LTV
$617.94 New
$595.76 Old
A borrower will need an estimated $75-80 more in monthly income or $900 more per year to qualify per $100,000 in loan amount.
This is cutting edge news and a more formal announcement will follow, however if you are a home buyer considering FHA financing, you might want to keep that September 7th date in mind to save some $s.
Should you have any questions on the home buying process, give us a call at 626-629-8439 and if you have any FHA financing questions, give Mondie Pic'l at Fairway Mortgage a call. She can be reached at 626-233-1303.
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