FHA Increasing Cost of Mortgage Insurance And Requiring Payment For Life of Loan

Federal Housing Administration Commissioner Carol Galante recently announced a series of changes to be issued that will allow the agency to better manage risk and further strengthen the health of the Mutual Mortgage Insurance Fund (MMI).

FHA will increase its annual mortgage insurance premium for most new mortgages by 10 basis points, or 0.10%.   The FHA will also require most borrowers to continue paying annual premiums for the life of their mortgage loan.

Previosly, FHA cancelled required MIP on loans when the outstanding principal balance reached 78% of the original principal balance… FHA remained responsible for insuring 100% of the outstanding loan balance throughout the entire life of the loan.  Becasuee of this cancellation policy, the MMI Fund loan  determined it was missing out on a signifcant stream of revenue. Thus, the FHA will collect premiums based upon the unpaid principal balance for the entire period for which FHA is entitled, permitting FHA to retain significant revenue that is currently being forfeited prematurely.

St. Louis MORTGAGE INTEREST RATES for January 30, 2013:

  • Conventional 30-Year Fixed 3.500%/ 3.777% APR
  • Conventional 15-Year Fixed 3.000% 3.097% APR
  • Conventional 7/1 ARM 2.625%/ 3.332% APR
  • FHA/VA 30 Year Fixed 3.25%/4.160% APR
  • Jumbo 5/1 ARM 2.625%/ 2.426% APR
  • Jumbo 15 yr Fixed 3.000%/ 3.094% APR
  • Jumbo 30 yr Fixed 4.625%/ 4.719% APR

*The above mortgage rates are based upon an 80% LTV, o/o single family with FICO scores of 720.   Fees/rates may vary for different loan amounts and will affect the actual APR.  Quoted rates are for 740 credit scores or greater with 80% LTV (Loan to value) or less.  All pricing is dependent on applicant’s LTV, credit score, and state residence.  Conforming rates are for a primary residence in the St. Louis MSA over $150,000 & under $417,000.

This information is provided to you for informational purposes only and is not an advertisement to extend customer credit as defined by Section 226.2 Regulation Z. Contact Paramount Mortgage to learn more about its mortgage products and your eligibility for such products. Program rates, terms and conditions are subject to change at any time.

Paramount Mortgage is a locally owned Mortgage Banker celebrating our 41st year. Great rates and programs are secondary to what is most desired in a lender relationship: Integrity, Communication and Customer Satisfaction. Be to check out our website: www.paramountmortgage.com

For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.



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