Idaho Home Buyers Did You Know FHA Made Changes To Mortgage Insurance Requirements

- MONTHLY INSURANCE PREMIUM INCREASES FOR FHA HOME LOANS

Previously the monthly mortgage insurance premium was a factor of .55% of the loan amount (if the loan to value was over 95%). As of October 4, the factor has increased to .9% You are probably wondering how this affects the payment. On a $400,000 mortgage, using the old factor of .55% the monthly mortgage insurance would have been $183. Now Using the .9% monthly mortgage insurance factor we are looking at a monthly mortgage insurance payment of $300. This is an increase of $117 a month compared to the previous mortgage insurance for a $400,000 FHA mortgage. The great thing is even though the monthly mortgage insurance is higher the upfront insurance premium has decreased.

- DECREASE IN THE FHA UPFRONT MORTGAGE INSURANCE PREMIUM

The Upfront Mortgage Insurance Premium used to be 2.25%. But on October 4, 2010, they dropped it to only 1%. Using the same base loan amount as our previous example of $400,000 and using the old (UFMIP) of 2.25% $9,000 would have been added to the Idaho home buyers loan making the total loan amount $409,000. With the new upfront mortgage insurance premium of 1% we would have a total loan amount of $404,000.

- FHA STILL BEST OPTION FOR IDAHO FIRST TIME HOME BUYERS

FHA is still the best option for Idaho first time home buyers. While Conventional Fannie Mae and Freddie Mac guidelines continue to be very tight for low down payment home buyers, it is still fairly flexible. It will allow higher debt to income ratios, lower FICO score, and also has more of a “makes sense” underwriting philosophy. While it allows as little as 3.5% down payment, some Idaho home buyers with 10%, 15% and even 20% down payment are finding FHA to be the best choice.

Often times borrowers have questions about FHA mortgages. If you have any questions about FHA mortgages feel free to contact me.

Want to find out more about FHA mortgage insurance changes, then visit Michelle Guth’s site to learn more about Idaho FHA Mortgage Insurance Changes.

Michelle Guth
Diversified Mortgage Group
Branch Manager/Owner
Direct: 208-475-0865
Loanswithmichelle@gmail.com
ID MBL-5696 / NMLS # 36853 / 36852 / 1850
www.idahohomegroup.com

If you are purchasing a home in the Boise Idaho area don’t forget to have your carpets cleaned by a professional boise carpet cleaning company before moving in.