Mortgage Insurance Change (PMI) makes FHA even MORE attractive

By
Mortgage and Lending with HomeBridge Financial Services (NJ) NMLS 248937

Mortgage Insurance Changes

We have seen Private Mortgage Insurance rates climb.  We just received an announcement that the factors for Monthly PMI (the most common form of PMI) have gone up.

Why?  Much like any insurance company, they do not want to pay out... since they have been paying out more in the past year they have raised rates... You see similar issues in states that have had high pay outs on home owners insurance for storm damage, Fl, LA etc.... Even in NJ Home owners insurance is higher near tidal water because of hurricane pay outs in other states.

What does this mean to you? Increased payments of course. here are a few examples for a 200,000 mortgage with 3%, 5%, 10% and 15% down:

  • 3% down (not as common) was $138.33/month NOW $175.00/month
  • 5% down WAS, $131.67 per month. It is NOW $156.67/month
  • 10% down Was $86.67 per month. It is NOW $103.33/month
  • 15% down Was $55.00 per month. It is NOW $63.33/month

 As you can see the difference is not as bad as you increase the down payment.  Historically 15% down loans never go bad so there is less risk, while the lower the down payment the higher the risk, thus higher premiums.

Now more than ever, FHA is more likely to be the way for you to buy a home when mortgage insurance is required (Even with the new changes in FHA MIP )

In the past I would advise that less than 10% down FHA would be the best way to go, now it is something to consider for any down payment lower than 20%. A comparison needs to be done to be sure the right program is picked for YOU. Keep in mind that Conventional loans have interest rate add ons below a 720 credit score.... FHA does not have Interest Rate Add ons for loans at all. There are some lenders that will put their own add ons for loans they feel are risky, (sub 620 credit score is common for add ons).

Now more than ever you need a Loan Officer that understands your needs and will review your scenario to pick the best option for YOU!

I have said it before: What was old is new again. FHA is still one of the BEST ways for some one to buy a home with a low down payment.

Have a great weekend

Rob

Robert Rauf

www.RobertRaufhomeloans.com

(732)740-0175

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Location:
New Jersey Ocean County
Tags:
mortgage
mortgage advice
mortgage guidlines
mortgage information
mortgage news
mortgage options
fha mip
fha
nj
nj mortgages

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainer
166,611
Tamara Perlman
Referral Network Inc. - Truckee, CA

Robert--

Good info!   Wanted to say thanks directly for the feedback on the condo FNMA qualifications issue.  Deal closed late yesterday with Countrywide as the lender!  I appreciate your confirmations and that you gave info freely even though you weren't a part of the deal.  I love the AR family and their willingness to help each other!

Jul 18, 2008 10:54 AM #1
Rainer
166,611
Tamara Perlman
Referral Network Inc. - Truckee, CA

Speaking of free advice.... any suggestions on who the condo association should talk to regarding changing their language so that they could be in conformance with the latest FNMA guidelines??? The association president is eager to help the other owners of the complex have an easier time with the financing.

Jul 18, 2008 10:57 AM #2
Rainmaker
590,790
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

You are welcome Tamara... I just sent you an email...

Jul 18, 2008 11:08 AM #3
Anonymous
Anonymous

Dallas homes for sale, Call 972-699-9111 Lynn 911 Dallas Top Real Estate Agent, Dallas homes for sale, Dallas home foreclosures for sale, Dallas homes for sale, Dallas foreclosures, Dallas apartments for rent, Dallas apartment rentals, http://www.lynn911.com , http:// dallasapartmentforrent.blogspot.comI am not only a realtor and a loan officer, however I have my mortgage broker partner handle all this I happy reading blogs sometimes I get to far out of the loop on real estate transactions, dragging in the business not in the office much LOL

Jul 21, 2008 12:18 AM #4
Rainer
215,024
Lisa Friedman
Alliance Realtors - Bedminster, NJ
Central New Jersey Real Estate

Rob, this is good info. Its nice to be able to see the difference in pmi at various downpayments.

Jul 25, 2008 10:56 PM #5
Post a Comment
Spam prevention
Show All Comments
Rainmaker
590,790

Robert Rauf

Ask me a question
*
*
*
Spam prevention

Additional Information