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More on Insurance Premium Increases

March 2, 2012

Before the end of 2011, Congress and President Obama agreed to extend the payroll tax cut. One item that got snuck into the bill was a little piece allowing HUD (Department of Housing and Urban Development) to increase insurance premiums on FHA loans (Federal Housing Administration). This fee increase is likely to take effect by April 1, 2012.

Currently, FHA charges two insurance premiums – one is the upfront-front mortgage insurance premium (UFMIP) and the other is the monthly mortgage insurance (MMIP). The increase in fee will be twofold. The UFMIP fee is expected to increase 0.1 percentage point, which works out to about $15 a month more on a $200,000 mortgage. The MMIP is also expected to increase 0.1 percent.
The FHA program has already had a recent fee change. On April 5th 2010, HUD reduced the UFMIP from 2.25 percent to 1 percent of the loan amount, which was how they justified the increase of the MMIP from .55 percent to 1.15 percent. With the changes, we are now looking at a 1.1 percent UFMIP and a 1.25 percent MMIP.
When the UFMIP increases, so will the cost of purchasing a home with the low-down payment program as well as refinances (including streamlines). If you have FHA loans, understand that the cost is going to go up and it’s a matter of when and how much. Don’t delay, submit today!

FOR A FAST PRE-APPROVAL:
http://pmcmortgageloans.com/mortgage_application.php

First, complete a loan application on our website
-Go to http://www.pmcmortgageloans.com
-Click on Apply Now at the top
-Scroll to the middle of the page and Click on 3. Full Application
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