FHA Mortgage Insurance Premium (MIP) vs. FHA Upfront Mortgage Insurance Premium (UPMIP)
When acquiring for an FHA loan there are two types of mortgage insurance requirements that need to be fulfilled. The first is the Up-front mortgage insurance premium (UPMIP) that will need to be paid at the closing of your loan. The second is an annual mortgage insurance premium (MIP) requirement that is paid monthly.
Increase to the FHA mortgage insurance Premium (MIP)
Since FHA mortgages is very a popular option for homebuyers, many changes were made. For all FHA loan case numbers opened on or after April 1,2013 an increase in FHA annual mortgage insurance premium percentages were made (which is added into your monthly payment, just like your property tax).
|
Term > 15 Years |
|||
|
Base Loan Amt. |
LTV |
Previous MIP |
New MIP |
|
≤ $625,500 |
≤ 95.00% |
1.2% |
1.3% |
|
≤ $625,500 |
> 95.00% |
1.25% |
1.35% |
|
> $625,500 |
≤ 95.00% |
1.45% |
1.50% |
|
> $625,500 |
> 95.00% |
1.50% |
1.55% |
|
Term ≤ 15 Years |
|||
|
≤ $625,500 |
78.01% – 90.00% |
.35% |
.45% |
|
≤ $625,500 |
> 90.00% |
.60% |
.70% |
|
> $625,500 |
78.01% – 90.00% |
.60% |
.70% |
|
> $625,500 |
> 90.00% |
.85% |
.95% |
For loans less than $625,000 with 95% equity or less (down payment of 5% or more) the previous MIP was at 1.2% of your loan amount, this has now increased to 1.30% of your loan amount. For properties that contain more than 95% equity (less than 5% down) the annual mortgage premium is 1.35% of your loan amount.
For example: The added monthly payment for a single-family residence that is worth $300,000 with a loan amount of $289,500.00 (3.5% equity or down) would carry a mortgage insurance payment of $325.68.
When will my FHA mortgage insurance premium (MIP) drop?
FHA tightened their guidelines regarding cancellation of the annual Mortgage Insurance Premium (MIP). With previously FHA mortgage insurance premiums would drop once your equity would be paid down to 78% loan to value. This is no longer the case for all FHA case numbers opened on or after April 1, 2013, mortgage insurance premium will be required as follows:
|
Term |
LTV (%) |
Previous |
New |
|
≤ 15 yrs |
≤ 78 |
No annual MIP |
11 years |
|
≤ 15 yrs |
> 78 – 90.00 |
Cancelled at 78% LTV |
11 years |
|
≤ 15 yrs |
> 90.00 |
Cancelled at 78% LTV |
Loan term |
|
> 15 yrs |
≤ 78 |
5 years |
11 years |
|
> 15 yrs |
> 78 – 90.00 |
Cancelled at 78% LTV & 5 yrs |
11 years |
|
> 15 yrs |
> 90.00 |
Cancelled at 78% LTV & 5 yrs |
Loan term |
For a pre-approval, information or questions about an FHA loan please contact us.
