FHA Mortgage Insurance Premiums Rising Again

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I contribute regular mortgage market commentary to HSH.com, a well-known financial market website. HSH is known for its data and analysis, and those are two things I love about the mortgage business. My most recent piece for HSH is now live.

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Last Chance To Beat The FHA PMI Increase

Today’s article is titled “Act Today And Beat The Mortgage Fee Increase“. It’s about the December 2011 Payroll Tax Extension program that passed into law. The government voted to finance the tax break’s $ 33 billion price tag via fees collected on new mortgages. If your next mortgage is either conventional or FHA, therefore, be prepared for new, mandatory loan fees.

For Fannie Mae and Freddie Mac conventional loans, the expected fee hike is 0.125% to your mortgage rate. For FHA borrowers, it’s a 10 basis point increase to your annual mortgage insurance premium.

This marks the 5th increase to FHA mortgage insurance premiums in as many years. Because of the changes, it’s harder for FHA-insured homeowners to meet the FHA Streamline Refinance program’s “5% Savings Rule“. Fewer FHA-insured homeowners will qualify for the FHA Streamline Refinance program going forward.

As explained in the article :

The new fees are expected to be in place very, very soon.

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Beat The Payroll Tax Fee. Apply Today Instead.

Mortgage rates are low. We all know that. But low rates don’t matter if you have to pay an arm-and-a-leg to get them. Each new loan fee; each new price change; each new adjuster — it all adds up, costing you money. Costs can be so high that low rates no longer matter.

Don’t let that happen to you. If your loan is locked and in-process before the Payroll Tax Extension fees go live, you’ll be exempted from the fees forever. The trick is to apply before the fees are changed.

Unfortunately, we don’t have an exact date on it. Your safest bet, therefore, is to get started with a rate quote now.

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