Previously the monthly mortgage insurance premium was a factor of .55% of the loan amount (if the loan to value was over 95%). As of October 4, the factor has increased to .9% You are probably wondering how this affects the payment. On a $400,000 mortgage, using the old factor of .55% the monthly mortgage insurance would have been $183. Now Using the .9% monthly mortgage insurance factor we are looking at a monthly mortgage insurance payment of $300. This is an increase of $117 a month compared to the previous mortgage insurance for a $400,000 FHA mortgage. The great thing is even though the monthly mortgage insurance is higher the upfront insurance premium has decreased.
– FHA UPFRONT MORTGAGE INSURANCE PREMIUM DECREASED
The Upfront Mortgage Insurance Premium used to be 2.25%. But on October 4, 2010, they dropped it to only 1%. Using the same base loan amount as our previous example of $400,000 and using the old (UFMIP) of 2.25% $9,000 would have been added to the Idaho home buyers loan making the total loan amount $409,000. With the new upfront mortgage insurance premium of 1% we would have a total loan amount of $404,000.
– IDAHO FIRST TIME HOME BUYERS FHA IS STILL YOUR BEST OPTION
FHA mortgages are still the best option for first time home buyers looking to purchase in Idaho. While conventional fannie and freddie guidelines continue to be very tight FHA is still fairly flexible. FHA allows for lower fico (credit scores) as well as as little as 3.5% down payment. FHA also has more of a “makes sense” underwriting philosophy. Many Idaho home buyers are finding FHA to be the best choice even if they have quite a bit of money to put down.
If you have questions about an Idaho FHA mortgage whether you are purchasing or refinancing a home feel free to contact me.