FHA today announced reduction in upfront Mortgage Insurance Premium (UFMIP) for Santa Clara county First Time Home Buyers and FHA Streamline Refinance on Bay Area homes.
The announcement today will reduce the upfront mortgage insurance premium to 1% from the current 2.25%. At the same time, the annual mortgage insurance premium currently at .55% for the minimum downpayment of 3.5% will go up to .90%. For downpayments at 5% or more the annual mortgage insurance may go up to .85% from the current .50% on a 30 year fixed loan. These are my personal estimates based on the announcement. More precise details from FHA are still awaited.
Lets take an example at $400,000 loan amount to see how it impacts you.
As you can see in the table above, the new policy change increases the monthly payment on an FHA loan and hence also requires higher income to qualify for the same loan amount. In a nutshell, depending on how you look at it it’s both a good and a bad news for Santa Clara First Time Home Buyers and homeowners seeking to get an FHA Streamline Refinance.
We are a Santa Clara County based FHA approved lender and will be glad to advise you if FHA loans are a good option for financing your home. To schedule a free consultation, please email me at Shashank@ArcusLending.com or call my office at 408.615.0655.
Click the link to read FHA Commissioner’s David H Steven’s announcement on this topic.
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We are not the FHA, VA, USDA, HUD or any other government organization. The content on this blog is intended for information purposes only. 
