Guest Blogger: Base Hit Exhibitor #114 – Big Valley Mortgage

FHA recently increased its up-front and annual mortgage insurance premiums, causing many in the industry to believe that conventional lending programs, and resultant private mortgage insurance, may become more attractive than that offered by the FHA insured program.

FHA increased its premiums last month as follows:

• The Upfront mortgage insurance premium (UFMIP) rose from 1.00% to 1.750%
• The Annual premium – paid monthly – (MMI) rose from 1.15% to 1.25%

For many buyers, this change will result in a minimal increase in their final mortgage payment. The monthly mortgage payment for a typical $200,000 home will increase about $25 per month as a result of these changes, as shown in the chart below:

Comparison of Monthly Mortgage payment

(Pre and Post FHA Insurance changes)

FHA is still delivers base hits every inning by offering borrowers the following benefits:

• Gift Funds for Down Payment and/or closing costs
• Non-Occupant co-borrower with blended ratios
• Seller can pay all closing costs
• Liberal underwriting guidelines
• Except for VA and specialty products, the lowest required Down Payment of 3.5%
• The ability to finance home improvements and energy efficient upgrades at the point of loan origination into one loan

Big Valley Mortgage | CA DRE #01215943/ NMLS #1850 | Licensed by the Department of Corporations under the California Residential Mortgage Lending Act | Figures Displayed are for Real Estate Professionals Only | Not For Public Consumption | APR = 4.775% | 4.664%