FHA Increases Annual Mortgage Insurance Premium

FHA Commissioner David H. Stevens announced on 02/14/11 that a 0.25% increase in annual mortgage insurance premium (MIP) will apply to all new 30- and 15-year loans insured by the FHA on or after April 18, 2011.  The marginal increase is estimated to impact new FHA borrower MIP payments by $30 more per month.  Stevens states, “After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster the FHA’s capital reserves and help private capital return to the housing market.  This quarter point increase in the annual MIP is a responsible step towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain the most cost effective mortgage insurance option for borrowers with lower incomes and lower down payments.”  http://bit.ly/efrU95

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