[quote=sdrealtor]HOA and taxes should be less and iunterest rate is lower. I’d dropp the monthly carrying cost about $100.
Also FHA buyer could ask for 3% closing cost credit and get in for only the 3.5% down.
Only issue is actually findig one to buy.[/quote]
How is a buyer going to successfully ask for and receive a $3K closing-costs credit (for up-front MIP?) if condos in MM typically have cash offers from investors to consider?
And how many of the complexes there will actually qualify for FHA financing … that is, have enough owner-occupants in them?
birmingplumb, the *new* MIP for FHA loans is costly.
Breaking Down The April 2012 FHA Mortgage Insurance Premium Changes
The “other shoe” dropped Monday when HUD announced that mortgage insurance for FHA loans will increase April 1, 2012 and again June 1, 2012. Mortgage insurance, similar to Fannie Mae and Freddie Mac guaranty fees, protect one party from the risks of the borrower becoming delinquent of going into foreclosure.
FHA loans have two tiers of mortgage insurance.
As FHA mortgage insurance exists today, there is an up-front mortgage insurance premium equal to of 1 percent of the loan’s amount. Upfront MIP can be added to closing costs, or borrowers can finance it by adding it to the loan amount.
There is also an annual MI premium that varies by loan type. For 30-year fixed rate mortgage, annual MIP is equal to 1.1% of your loan size for LTVs of 95% or lower. For everyone else, annual MIP is 1.15% of the loan size.
Annual MIP is paid monthly. The formula is (Loan Size) * (MIP Rate) / (12 Months) = Monthly MIP payment.
So what the does the FHA’s new mortgage insurance rates mean to FHA mortgage applicants?
Starting April 1, 2012, Upfront MIP for loans raises from 1.000% to 1.750% of the loan size. Annual MIP fees change, too, climbing by 10 basis across the board, and by an additional 25 basis points for loans between $625,500 and $729,750.
$729,750 is the largest FHA loan limit. It’s reserved for high-cost areas like the Washington, D.C. Metro area, New York City, and many parts of California.
If you think you’ll want an FHA loan for your next mortgage, the best way to avoid the new FHA fees is to have your FHA Case Number assigned before the new FHA MI premiums go into effect April 1, 2012. All existing FHA mortgages will use the “old” MI rates.
