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Monday, March 24th, 2014 at 10:21pm
FHA’s new mortgage insurance
Want to put less than 5 or 10% down? You’re likely going to get an FHA loan. Due to increased risk of defaults, HUD earlier this year increased its upfront mortgage insurance premium (MIP) from 1.75 to 2.25%. Now, starting in October, they are increasing the annual premium while decreasing the upfront premium. This is after being given authority to do so by Congress in H.R. 5981.
New premiums for FHA 30 year fixed:
For borrowers putting 3.5% down:
1% upfront and .9% annually
(Previously 2.25% upfront, .55% annually)
For borrowers putting 5% down:
.9% upfront and .85% annually
(Previously 2.25% upfront, .5% annually)