Posted on | November 26, 2012 |
Megan Hopkins, wrote in her Nov. 21 blog, Rewired, about an under-reported tidbit she found that I?d like to share with you.
It concerns the Federal Housing Administration?s decision to reverse an original plan to cancel the mortgage insurance program for its mortgages.
For those of you with FHA-backed mortgages who are looking into a streamlined refinance, Hopkins of HousingWire.com suggested this is the time to act, writing that: The U.S. Department of Housing and Urban Development, in its 2012 annual report, plans to reverse its stance cancel requiring payments of monthly mortgage insurance premiums on new FHA-backed loans sometime in 2013.
The FHA believes this will strengthen its capital position.
Hopkins wrote that while FHA?s 100 percent insurance guarantee remained in effect for the 30-year life of a loan, borrowers have been required to pay the mortgage insurance premiums for less than 10 years.
According to a FHA statement, this put the FHA in a compromised position ? lacking premiums to cover losses on loans that went into default.
Currently, once the principal balance on a mortgage hits 78% and at least 60 mortgage payments have been made, you are free from paying the insurance premium.
The change applies to new loans. New homebuyers who finance their home through FHA in the future should see the mortgage insurance payments remain due on the loan until the house is sold or refinanced under conventional mortgage.
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Source: http://blog.pe.com/real-estate/2012/11/26/real-estate-new-twist-on-fha-mortage-insurance/
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