Starting April 1, changes are being made in FHA loans that will have an impact on borrowers. After that date, the upfront MIP(Mortgage Insurance Premium) will go to 1.75% of the loan. The monthly MIP will be 1.35% of the loan. For example on a home selling for $165,000:
| Home Price | FHA 3.5% Downpayment | Gross Loan Amount | ||||
| $165,000 | $ 5,775.00 | $159,225.00 |
| 1.75% MIP | New Loan Amount | Monthly MIP 1.35% Divided by 12 | |||
| $2,786.44 | $162,011.44 | $182.26 |
For specific questions, please contact your lender.
For borrowers putting down 5% or more, the MIP will be 1.30%. Additionally, starting June 30, a new guideline calls the mortgage insurance premium to be carried for the life of the loan if the borrower puts less than 10% down. If the borrower puts down more than 10%, then the MIP is carried for 11 years. Of course, all of this has to do with the number of foreclosures that have taken place which has put a strain on the reserves of the FHA.