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Rates are flat today. Today’s rates with no lender fees are 3.875% APR on a 30 year, 3.1250% APR on a 15 year and 3.0% APR on a 10 year. (click here for details)

Today I will break out a few rules about to change on April 1 of this year and some rule changes that are being talked about right now.

Check it out in today’s video:

Let’s start with the April 1 changes. FHA has announced that it will increase its mortgage insurance premiums – This is for both the upfront premium AND the annual premium.

The upfront mortgage insurance premium or UFMIP is going to go up from the current 1% to 1.75% – OUCH! That means if you are doing a 200,000 mortgage it will go from a $2,000 premium to $3,500. Now don’t forget this premium is usually financed so you get to pay interest on the amount as well. They are also raising their annual mortgage insurance premium 10 bps. The actual factor will depend on your LTV and loan term but one thing is for sure. It’s going up.

Hey and if you are lucky enough to have a mortgage over $625,500, you will get to pay an additional .25% annual mortgage insurance fee.

So like I said these changes go into effect April 1. These change apply to any new case numbers pulled on that date and after. That means if you are looking to refinance your FHA loan or buy a house using FHA financing it becomes more expensive after that April 1 deadline.

So if you are waiting for a better rate to buy a house or refinance, you might want to reconsider. You should be looking at the cost increase as well.

Now I want to mention two other changes that are being talked about right now. The first one is the reduction of the upfront mortgage insurance premium for streamline refinance loans only. This means if you were looking to do a streamline in the past, and it didn’t make sense because of the higher MI factors, you might have a better option in the future.

Now this would only be for anyone with a loan originated prior to June 1, 2009. This is the same as the Fannie/Freddie Harp 2.0 rule – This would be great, but it’s not set in stone yet.

The other change is the reduction of seller credits on purchase transactions from the current 6% allowable credits to 3%. I don’t see a problem with this rule as long as the lender can offset anything over the 3%.

So changes are coming. Be prepared and plan accordingly. There is no doubt that if you are looking to buy a new home with an FHA loan – There is no better time than now.

If you thought this was good information or worth discussing, help me bring transparency to mortgage lending by sharing today’s episode on Facebook or Twitter.

Let’s change the way people shop for a mortgageā€¦forever!

– Mike

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