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FHA monthly MORTGAGE INSURANCE Premiums
Scheduled to increase in October
The Federal Housing
Administration (FHA) is scheduled to increase the monthly
mortgage insurance premium (MIP) for FHA loans on Oct. 4 2010.
North Dallas Homebuyers have until that date to lock into the
lower rates, after that the monthly insurance premiums paid on
FHA loans will increase by over 63 percent.
Under the current
program homebuyers purchasing a $200,000 home with a $193,000
FHA loan would pay an insurance premium of $88.46 per month.
If you buy a
house after Oct 4th 2010, the insurance premium is
scheduled to increase to $148.01per month.
FHA loans also
incorporate an upfront MIP fee. This upfront mortgage
insurance premium will be decreasing slightly with the
implementation of the new monthly increase but the overall
impact to the homebuyer is an increase in your total
out-of-pocket monthly cost, they were set at 2.25%
Sellers can pay the
upfront premium at closing or it can be financed back into the
loan amount. Homebuyers rarely pay the upfront mortgage
insurance fee, most elect to role the charge into the loan
which in turn increases the monthly mortgage payment.
FHA has also announced a
minimum credit score eligibility limit:
Borrowers with a credit
score of less than 500 are no longer eligible for FHA-insured
mortgage financing.
Borrowers with a credit
score between 500 and 579 are limited to 90 percent LTV.
Borrowers with a credit
score at or above 580 are eligible for maximum financing.
FHA decreases Seller
Concession
amounts
After April 5th 2010 FHA will allow a maximum of 3% of the sales price for seller concessions, this is
down for the normal 6%.
Seller concession is the amount of money the seller can
contribute toward the buyer's closing costs.
That's a difference of $3,000 for every $100,000 purchase
price.
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