FHA reverse mortgage insurance premium

If you haven’t heard, FHA announced on February 14th that it is raising the annual mortgage insurance premiums, also known as the FHA monthly mortgage insurance. These changes are mentioned in Mortgagee Letter 11-10 and become effective on or after . The new change is 25 bps more.

I have already heard that some of you think this will hurt the housing market and our economic recovery. Why the changes? HUD wants to strengthen the FHA’s Mutual Mortgage Insurance Fund, known as the MMIF. Think about it this way. If FHA doesn’t become pro-active now and FHA disappears in the future, then where do you think we would be regarding financing options.

Keep in mind that Fannie Mae has a pricing change that goes into effect on April 1st, 2011. That many lenders and investors have already made this change to their pricing. Also, there is no change to the Upfront Mortgage Insurance Premium of 1 percent for FHA loans, just the monthly premiums have been changed.

Old verse New Monthly Mortgage Insurance Changes

As you can see by the red arrow, indicating that this goes into effect on April 18th, not April 4th. So what does this all mean to those refinancing or buying new homes with a FHA mortgage?

This is based on a 0, 000 sales price and the end result is that it would cost the buyer .26 more in their total monthly mortgage payment. You can also look at it from the flip side when qualifying buyers. This could lower the new buyers purchasing power by about $9, 000. Meaning, instead of the $250, 000 purchase price in the example, they can now afford a $241, 000 home.

This new change is for your primary 1 to 4 unit properties. This change does not affect Title 1 loans, the HECM loan (reverse mortgages – which I am writing about tomorrow), the HOPE loan, and a few other types of FHA loans. This can also be found in the new FHA mortgagee letter 11-10.

There are also new changes to how one would have to request a FHA case number, cancellations of FHA case numbers, and a few other issues. These changes can also be found in the new FHA mortgagee letter 11-10.


Reverse mortgages for seniors over 62

2002-10-04 12:42:16 by RMdude

Know any senior citizens who might lose their home due to crappy economy and massively declining pension/savings income? The HUD/FHA guarantees loans for senior homeowners over the age of 62. There are three lenders (primary) Financial Freedom, Wells Fargo, and Seattle Mortgage. Each county has a different maximum amount that FHA/HUD allows. The age of the youngest (over 62) homeowner is factored against the maximum for the county to determine the principal amount to be borrowed. The loan points, FHA insurance, and closing costs are subtracted and the balance is available for monthly payments for life, a line of credit and/or lump sum distribution

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