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Here comes the Red headed stepchild again(MIP going up content)

By Tenpoundbass   2013 Jan 30, 10:01pm   324 views   0 comments   watch (1)   quote      

FHA to hike premiums on mortgages

It's a good thing I bought when I did.

The Federal Housing Administration, which is the largest insurer of low-down payment mortgages, announced Wednesday that it will raise premiums by 10 basis points, or 0.1%, on most of the new mortgages it insures.


Translation: A borrower opting for a 30-year, fixed-rate mortgage who puts 5% or more down will now pay an annual insurance premium of 1.3% of their outstanding balance. And someone who puts less than 5% down will pay a premium of 1.35%.

The agency said it will also raise premiums for borrowers with jumbo loans -- or loans of $625,000 or more -- by 5 basis points, or 0.05%, and increase the minimum down payment requirement on these loans to 5% from 3.5%.

At the time I bought my MIP is only $70 a month, there has been two hikes already since Nov 2010. At this rate now, the interest would have to fall bellow 1% for me to save money by refinancing. Not that my mortgage is unmanageable, as I DID get a good MIP rate.
It seems to me that this MIP is only going to futher ensure defaults on FHA mortgages, I guess that's what they really want. A revolving door of tenants and banks flipping the houses back to them selves each time, at the tax payers expense of course.

FHA said it will require most buyers to pay insurance premiums for the life of their loan. A policy that was put in place in 2001 allowed borrowers to cancel premium payments once their debt fell below 78% of the principal balance.

I wonder if any of this is retro? As my contract said the premium would roll off once my equity got above 20% or so?

Last spring, FHA increased both premiums and upfront costs on mortgages.

And the spring before that.


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