Its a great time to Buy a Home!
The real estate market is improving and one major factor is mortgage interest rates. Conventional rates with 20% down are 3.5% for 30 year terms and 3% for 15. FHA rates are even better with 30 year rates at 3.25% and 15 year terms 2.75%.
FHA requires just 3.5% down, but you must pay mortgage insurance premiums. The chart below shows monthly principal, interest and mortgage insurance payments on a $200,000 loan principal (excluding insurance and property taxes):
|30 Year||15 Year|
FHA Mortgage insurance varies based on down payment and loan term.
On loans with greater than 15 year terms, the new amount depends on the down payment.
On or after 4/9/2012 on any loan amount – If the loan to value is <= 95%, the new Annual Premium is 120 basis points (bps). If the loan to value is >95%, the new Annual Premium is 125 basis points (bps).
On loans equal to or less than 15 year terms with Loan to Value above 78%, the new amount depends on the down payment.
On or After 4/9/2012 on any loan amount – If the loan to value is <= 90%, the new Annual Premium is 35 basis points (bps). If the loan to value is >90%, the new Annual Premium is 60 basis points (bps).
Note: SF forward mortgages with amortization terms of 15 years or less, and a loan to value ratio of 78% or less, remain exempt from the Annual MIP (Mortgagee Letter 2011-35).
Increase to Up-Front Mortgage Insurance Premium
The UPMIP will be increased from 1.0% to 1.75% of the base loan amount. This applies regardless of the amortization term or LTV ratio. The increase in UPMIP will be effective for all case numbers dated on or after April 9th 2012.