fha-mortgage1Ultimate guide to Upfront and Monthly Mortgage Insurance Premiums (MIP/PMI) rates for FHA purchase loans and (streamline) refinances in California, Washington and Texas.

FHA charges both an upfront mortgage insurance premium and monthly mortgage insurance on almost all the loans it insures. On December 23, 2011 the President signed into law Temporary Payroll Tax Cut Continuation Act of 2011which required FHA to increase the annual mortgage insurance premium.

Annual Mortgage Insurance Premium

FHA-MIP1

 

Annual Mortgage Insurance Premium on Streamlined Refinance Endorsed Before May 31, 2009

For all Streamline Refinance transactions that is refinancing FHA loans endorsed on or before May 31, 2009, the annual MIP will be only 55 bps regardless of the loan amount. For all other streamlined refinances, regular MIP rates will be charged. This is effective for loan applications taken (and FHA case number requested) on or after June 11, 2012.

FHA Monthly Mortgage Insurance Premium Calculator

The Loan Amount is multiplied with the Insurance factor and divided by 12 to arrive at the monthly mortgage insurance payment. For example – If your loan amount is $400,000 and your annual MIP is 120 bps, your monthly MIP payment would be – (400,000 x .0120)/12 = $400/month

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FHA Loans without any Annual Mortgage Insurance Premium

It’s not possible anymore. Loans with amortization of 15 years AND Loan to Value Ratio (LTV) of 78% or less used to qualify for no FHA annual mortgage insurance premium. However, this changed with effect from June 3, 2013. After that, it wasn’t possible to get any FHA loan without monthly mortgage insurance premium.

FHA Upfront Mortgage Insurance Premium (UFMIP)

The upfront mortgage insurance premium is 1.75% of the base loan amount. This applies to all loan terms and LTV ratios. FHA does allow financing of UFMIP into the loan amount. For example, if your loan amount is $400,000, instead of paying 1.75% or $7000 as closing cost, you can add that to your loan amount and make your principal balance $407,000.

FHA Reduced Upfront Mortgage Insurance Premium on Streamlined Refinance Endorsed Before May 31, 2009

For all Streamline Refinance transactions that is refinancing FHA loans endorsed on or before May 31, 2009, the UFMIP will be only 0.01% of the base loan amount. For all other streamlined refinances, regular UFMIP rates will be charged. This is effective for loan applications taken (and FHA case number requested) on or after June 11, 2012.

Click here to get an FHA Rate Quote

Contact me at (408) 615-0655 or Shashank@ArcusLending.com to get a free consultation or rate quote for an FHA financing in California, Washington or Texas.

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