HUD has released Mortgagee Letter 2011-10 announcing an increase in the current Annual Mortgage Insurance Premiums (MIP or known to many as PMI) by 25 Basis Points (BPS)–which is a percentage measure equal to 0.01%– for all FHA Loans (a federally insured loan allowing people to put as low as 3.5% down to purchase a home). Upfront MIP will not be changed.
The upfront premium will remain at 100 BPS and will be charged for all amortization terms.
For FHA purchases and refinances, the annual premium has been increased. The Annual MIP shown in basis points below is to be remitted on a monthly basis and will be charged based on the initial loan-to-value ratio and length of the mortgage according to the following schedule:
|LTV||>15 Year Loan-Annual MIP||LTV||<=15 Year Loan – Annual MIP|
|<= 95%||110 BPS (currently 85 BPS)||<= 90%||25 BPS (currently zero)|
|> 95%||115 BPS (currently 90 BPS)||> 90%||50 BPS (currently 25 BPS|
Effective Date: This increase in Annual Mortgage Insurance Premiums will be effective for all FHA case numbers assigned on or after April 18, 2011.
I am not a lender, so please check with your lender for particulars on any loan programs.
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