Las Vegas FHA mortgages - MIP

Posted on February 26th, 2009 by Matt Garnes

Mortgage Insurance Premiums

 

Mortgage insurance premiums (MIPs) provide lenders with some protection from defaulting borrowers by FHA payment of claims. Upfront mortgage insurance premiums are collected at the time of closing and paid to FHA. 30 year mortgages and some 15 year mortgages also require a monthly mortgage insurance premium. Annual mortgage insurance premiums are now automatically canceled when the loan to value reaches 78% provided the borrower has paid premiums for a minimum of five years on 30 year mortgages. FHA will determine when a borrower reaches 78% based on the original sales price or appraised value, whichever is less. Servicers provide current balance information to FHA in order to calculate the LTV.

Borrowers with decision credit scores below 500 and loan to value ratios at or above 90% are not eligible for FHA insured mortgage financing.

First time homebuyers that complete a HUD approved pre-purchase counseling program will receive a reduction on the upfront mortgage insurance premium to 2.75%. However, since no upfront mortgage insurance premium can exceed 1.75% for purchase transactions until September 30, 2009, this reduction will not take place until after that time. The couseling program must be completed prior to the borrower signing a contract to purchase a home and the class can be completed within one year before the date of the contract.  

For more information regarding mortgage insurance premiums call me directly at 702.526.3133 or via e-mail at: mgarnes@garnesmortgatge.com

Thanks for reading and make it a great day!!

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