The annual Federal Housing Administration mortgage insurance premium officially increase April 9 to 120 basis points for loans with terms greater than 15 years and loan-to-value ratios less than or equal to 95%.
The annual mortgage insurance premium for loans with terms greater than 15 years and higher loan to value ratios above 95% increases to 125 bps, according to Mortgage Letter 2012-4.
There is a 35 basis point annual mortgage insurance for loans with terms of 15 years or less and loan to value ratios above 78%, but no higher than 90%. For loans with the same term but loan to value ratios higher that 90% there is a 60 basis point annual mortgage insurance premium.
These increases stem from the Temporary Payroll Tax Cut Continuation Act signed into law on Dec. 23 of last year, which requires the Federal Housing Administration to increase the annual mortgage insurance premium it collects by 10 basis points, effective for case numbers assigned on or after April 9, 2012.
In addition, according to the Mortgagee letter, the upfront mortgage insurance premium on April 9 increases 75 bps to 1.75% from 1% of the base loan amount regardless of loan term or loan to value ratio.
Mortgages with terms of 15 years or less and loan to value ratios below 78% remain exempt from the annual mortgage insurance premium.
Further changes are coming on June 11 based on case number assignment date, according to the mortgage letter.
At that time the FHA said it will use its pre-existing statutory authority to add 25 bps of annual mortgage insurance premium to mortgages above $625,500.
Loans in this category with loan to value ratios equal to or below 95% and terms greater than 15 years will have a 145 basis point annual mortgage insurance premium. Mortgages above $625,500 with terms greater than 15 years and loan to value ratios above 95% will have a 150 basis point annual mortgage insurance premium.
The annual mortgage insurance premium for loans greater than $625,500 that have terms equal to or less than 15 years and loan to value ratios above 90% will be 85 basis points.
For all streamline refinance transactions that are refinancing Federal Housing Administration loans endorsed on or before May 31, 2009, the annual mortgage insurance premium will be 55 bps regardless of loan amount. The upfront mortgage insurance premium will decrease for these loans to 0.01% from 1% of the loan amount.
