FHA Changes Again

Effective last month, FHA announced more changes that affect buyers using FHA loans.

With every FHA loan, there is an Upfront Mortgage Insurance Premium (UFMIP) and an annual Mortgage Insurance Premium (MIP) paid monthly associated with it.

The recent changes are decreasing the amount of the UFMIP and increasing the MIP. This means less out of pocket when you purchase but a higher monthly payment.

Here is an example of how the changes affect your monthly payments (granted the loan amount in this example is a little low for our Seattle area condos and homes, but it is just an example people!)~

Old Rules – Before Oct 4th
Loan Amount: $161,500
UFMIP flat fee: 2.25%
UFMIP flat fee charge: $3633.75
Monthly MIP %: .55%
Monthly MIP cost: $73.48

New Rules – After Oct 4th
Loan Amount: $161,500
UFMIP flat fee: 1%
UFMIP flat fee charge: $1615
Monthly MIP %: .90%
Monthly MIP cost: $120.24

Click here to see Sheila Bryan's, a Mortgage Banker with Cobalt, information sheet on this.

Interested in purchasing a home or condo or with an FHA loan and want to know more? Send us an email or give us a call!