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FHA MI Changes

February 23rd, 2011

FHA MI Changes

The Federal Housing Administration has announced an annual mortgage insurance (MI) premium increase of a quarter of one percent (.25) on all 30- and 15-year loans. The annual MI premium is divided into 12 equal payments and added to the borrower’s monthly mortgage payment. The following table* illustrates the increase in payment that will be realized on an average 30 year FHA loan:

Monthly Payment Increase resulting in FHA raising Annual Mortgage Insurance Premium –
30 Year Term
Average Loan

≥ 95.00 percent LTV

Through April 16th, 2011
90 bps
On or After April 18, 2011
115 bps
Sales Price
$195,000
$195,000
Minimum Down Payment (3.5%)
$6,825
$6,825
Mortgage Amount without UFMIP
$188,175
$188,175
FHA Annual MIP (monthly payment)
$141.13
$180.33
Change in payment (monthly)
xxxxxxxx
$39.20
For those still on the fence about buying, this may be the time to jump before this increase is put into practice. Borrowers must choose a property and apply for an FHA case number by April 16, 2011 to be eligible for the current MI rate. Those choosing a property on or after April 18th will pay the additional quarter percent. The case number must be assigned by this date, but the home purchase may take as long as six months to close.
*Table and calculations provided by FHA. Subject to FHA program guidelines and qualifications. Subject to change without notice. All services rendered by Axiom Financial are to assist in providing mortgage loans. OAC. Not an offer to lend. © 2011 Axiom Financial LLC.

Changes are inevitable in our market, so talk to your Axiom Financial Mortgage Consultant to stay on top of the latest mortgage news.

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