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Friday, November 29, 2013
What is the Current Mortgage Insurance Requirements for a Louisville Kentucky FHA Loan?
On a KY FHA loan , you typically have to pay both an upfront and an annual mortgage insurance premium (MIP):
Upfront MIP on A Kentucky FHA Loan
Kentucky FHA loans now collexct upfront MIP cost 1.75% of the home loan. For instance, if you borrow $100,000, you must pay $1,750 ($100,000 x 1.75%). It can be paid in full upfront, or added to your mortgage balance. This MIP applies no matter your loan amount or term. Most FHA buyers in Kentucky choose to finance the MIP into the loan. If you decide to pay the upfront MI out of your own funds, then you must pay all the mi premium, not just a part of it. The FHA upfront mi fee is not refundable now. This is a change whereas you use to be able to get e refund if the loan was refinanced or paid off in the first 5 years.
Annual MIP on a Kentucky FHA loan
The annual MIP or monthly mortgage insurance is divided by 12 and added to your monthly mortgage payment. The current maximum of 1.35% of the loan amount. How much and how long you have to pay the annual MIP depends on the originating date of your loan, the amount, and your loan-to-value ratio. For example, if you borrow $100,000 on a 30 year FHA loan, the monthly mortgage insurance would be
$112.00 ($100,00 x 1.35=$1350/12=$112.00 monthly mi)
The monthly mi payable to FHA is now for life of loan. This is a big change to keep in mind because FHA use to drop the monthly mi once you reached to 78% ltv of the original balance.
For Kentucky FHA loans with less than 15 year terms the monthly mortgage insurance (Annual MIP) much cheaper.
FHA is changing the duration for the collection of MIP:
o For all mortgages with an original principal LTV of 90% or less, regardless of loan term, the annual MIP will be assessed for 11 years.
o For all mortgages with an original principal LTV greater than 90%, regardless of loan term, the annual MIP will be assessed for the entire life of the loan.
Loans of 15 year terms or less with LTV 78% or less will pay an MIP amount of 45 bps.
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