FHA today increased it’s upfront mortgage insurance premium requirements for Santa Clara County FHA Home Loans. Upfront Mortgage Insurance is the money that FHA collects at the time of closing a mortgage to insure the loan against default. Currently, this premium is 1.75% for most purchase and refinance transactions. However, effective April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent for purchase money and refinance transactions, including FHA-to-FHA streamlined refinance transactions. Below is the breakdown of FHA upfront mortgage insurance for different loan programs:
- Purchase Money Mortgages and Full-Credit Qualifying Refinances = 2.25 percent
- Streamline Refinances (all types) = 2.25 percent
- HOPE for Homeowners (Delinquent Mortgagors) = 2.00 percent
- Home Equity Conversion Mortgages (Also called Reverse Mortgages) = 2.00 percent
As a borrower, it means higher cost for you to take an FHA loan. However, FHA allows upfront mortgage insurance premium to be added to the loan amount. Hence the change in the policy wouldnt necessarily mean larger “cash to close” requirement.
Just last week, FHA had temporarily waived flipping requirements.
If you are a Santa Clara county First Time Home Buyer and/or want to know how the recent changes to FHA guidelines will impact you, please call me at 408.905.6261 or email me at shashank@arcuslending.com
We are not the FHA, VA, USDA, HUD or any other government organization. The content on this blog is intended for information purposes only.
First time home buyer s need this kind of information. Thank you for posting. Keep on helping out.
Thanks Jeff! Glad you liked it. If you or your clients have any questions on this post or have any other lending related question, feel free to reach out to me.