The Department of Housing and Urban Development recently announced changes to FHA loan premiums.
While upfront mortgage insurance premiums will remain at 175 basis points (1.75%), annual mortgage insurance premiums are seeing a decrease. Basis points will be dropping across the board. Depending on a few factors, your MIP could drop anywhere from 15 to 45 basis points.
Factors that affect this will include
- whether your term is 30 years, or 15 years and less
- whether your base loan amount is above or below $625,500
- whether your loan to value ratio is above or below 95% for 30 year terms, 90% for 15 year and shorter terms with a base loan of less than $625,500, and 78% for 15 year and shorter terms for base loans over $625,500
The largest mortgage insurance premiums decreases will be for high base loans with high loan to value ratios and shorter terms. But even for a more minimal 15 basis point MIP reduction, a loan below $625,500 can see savings of over $1000 per year.
These changes will take effect on January 27th, 2017, so anyone with an FHA approved mortgage can look forward to some big savings in the new year!