FHA releases info about premium increase

Feb. 23, 2011 - PRLog -- In a letter sent Monday 21, Assistant Secretary for Housing/Federal Housing Commission David H. Stevens explained the change, which will increase the mortgage insurance premium (MIP) on all 30-year and 15-year loans by a quarter of a percentage point (.25).

The increase impacts FHA loans with a case number assigned on or after April 18, 2011.

According to Stevens, FHA must increase its Mutual Mortgage Insurance (MMI) fund reserves – a two percent capital reserve ratio – to comply with current law.

“The MMI fund has been below the two percent threshold in our last two annual actuarial reports to Congress,” Sevens says; and that at the current rate, MMI will not meet its mandated level until at least 2015. “Raising the annual premium will enable FHA to increase revenues … Based on current volume projections, the annual MIP increase would generate an additional $2.5 - $3 billion annually.”

Stevens defended the increase’s unveiling during a down real estate market by calling the quarter-point increase “a responsible step towards meeting the two percent threshold, while allowing FHA to remain the most cost-effective mortgage-insurance option for borrowers with lower incomes and lower downpayments.

“I understand the concerns of those in the industry about this increase,” he says. “While I do not expect all to agree, we have made these moves to protect FHA so that it can continue its vital mission.”

While the monthly payments on the average FHA loan will go up about $30, it shouldn’t impact closing costs. The upfront MIP remains unchanged at one percent.

To read the Department of Housing and Urban Development’s Mortgagee Letter explaining the change (PDF format), visit HUD’s website.

FHA Buyers it's important to ACT NOW the Annually Adjusted Mortgage will cost you after April 18 $360/Year and on the life of the loan $10,800, this may prevent you for qualifying for a FHA Loan

$30 x 12= $360/Year x 30 Year = $10,800 buying before the due date will save you $10,800 on the life of the loan.

Call today and allow our Team of experts to help!

Jose E. Humaran, CDPE, REOS
Lic. Real Estate Broker
305.610.6597
jehumaran@hotmail.com
www.humasanre.com
HABLAMOS ESPAÑOL!

# # #

A Boutique of Real Estate Services in the State of Florida.

Always there for our customers and the communities we serve!

At Humasan Real Estate we are committed to providing excellent service while assisting you in your buying or selling process. We employ Realtors® who distinguish themselves in today's real estate market. It is the attention to the fine details that set our real estate professionals apart and continue to make Humasan Real Estate THE place to buy and sell real estate. We have made everything available to you 24/7 and only a click away - including information on properties for sale and access to the most professional sales agents in the business.

As a consumer you are entitled to all available resources for your real estate needs and We are here to help. We not only want to deliver the best Real Estate Service experience, you should expect it!