Risk based MIP Risk based pricing Mortgage Insurance Premium Up Front Mortgage Insurance Premium UFMIP FHA UFMIP


Future Risk Based Up Front MIP (UFMIP) Chart
Effective for case numbers ordered after September 30, 2009
Decision Credit Scores

850-680   679-640   639-600   599-560   559-500   499-300   None
<=90

90.01-95.00

>95

1.25

1.25

1.25




1.25

1.25

1.50




1.25

1.50

1.75




1.50

1.75

2.00




1.75

2.00

2.25

 
 

1.75

---

---

 


1.50

1.75

2.00
Notes
1.   Annual premium rates are: 50 basis points for loans with 5 and 10 percent downpayments; 55 basis points for loans with 3 percent downpayments; and 25 basis points for all loans with amortization terms of 15 years or less.

2.   Downpayment percentage is determined by the base loan-to-value ratio (LTV).  The “base LTV” is calculated by:   (1) dividing the base mortgage amount by the lesser of the sales price or appraised value of the property (for refinances, the base mortgage is divided by the appraised value of the property); (2) subtracting the result from 1 (one); and (3) multiplying by 100.   “Base mortgage amount” is defined as the mortgage amount prior to adding any financed closing costs or upfront mortgage insurance (UFMIP).

3.   Eligibility for the mortgage insurance premiums listed in the chart above is based on an applicant’s decision credit score (FICO).  A “decision credit score” is determined for each applicant according to the following guidelines: when three scores are available (one from each repository), the median (middle) value is used; when only two are available, the lesser of the two is chosen; when only one is available, then that score is used.  If more than one individual is applying for the same mortgage, the lender should determine the decision credit score for each individual borrower and then average them to determine the final decision credit score for the application.  That application “decision” credit score is then used to underwrite and determine if the mortgage is considered an acceptable risk.

4.   Except as provided below, eligibility for these insurance premiums is dependent upon borrower acceptance by TOTAL (Technology Open to Approved Lenders).  Therefore, all borrowers with valid credit scores must be scored by TOTAL.

5.   Borrowers not scored by TOTAL or with insufficient trade lines to generate credit bureau scores are considered as “none” in the premium chart and are priced accordingly.  Borrowers falling into cells with no premium price shown are not eligible for FHA-insured financing.

6.   If TOTAL refers a loan for manual underwriting and the underwriter deems that there are sufficient
compensating factors to create an acceptable risk to FHA, then the upfront insurance premium (UFMIP) charge will be as shown on the premium chart.

LTV

FHA charges Two mortgage insurance premiums on each FHA loan; Up Front Mortgage Insurance Premium (UFMIP)
and monthly mortgage Insurance (MMI)

FHA Upfront Mortgage Insurance Premiums (UFMIP)

UFMIP is paid once and is typically added to the loan amount.  Below are the premiums:
  • Purchase Money and Qualifying Refinances = 1.75 Percent.
  • Streamline Refinances (all types) =1.50 Percent
  • FHASecure (Delinquent Mortgagors) =3.00 Percent.

Monthly Mortgage Insurance Premium (MIP)
An annual premium, shown below, paid monthly, will also be charged based on the initial Loan to Value and length of the mortgage according to the following schedule:

30 Year Loans MIP
  • Less than 95% Loan To Value 0.50%
  • LTV >=95% Loan to Value 0.55%

15 Year Loans MIP
  • Less than 95% Loan to Value  None
  • LTV >=95% 0.25%
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APR
If Risk Base UPMIP Ever Goes Into Affect It is Expected to Look Like This.

FHA UFMIP Scheduled to Increase

Effective for FHA loans with Case Numbers ordered on or after April 5, 2010,  FHA UFMIP is scheduled to increase.

New Upfront Mortgage Insurance Premiums
FHA will charge revised UFMIP in an amount equal to the following percentages of the mortgage:
  • Purchase Money Mortgages = 2.25%
  • Full-Credit Qualifying Refinances = 2.25%
  • Streamline Refinances (all types) = 2.25%
  • HOPE for Homeowners (Delinquent Mortgagors) = 2.00%
  • Home Equity Conversion Mortgages = 2.00%

Annual Premiums
Annual premiums (MIP) will not change at this time.
In addition to UFMIP FHA charges an annual premium on their purchase and refinance products, the annual premium, shown in basis points below, is to be remitted on a monthly basis, and will be charged based on the initial loan-to-value ratio and length of the mortgage according to the following schedule:

LTV    Annual for Loans >15 YrsLTV     Annual for Loans < 15 Years
< 9550 BPS                     < 90-None-
> 9555 BPS                     > 9025 BPS

RISK BASED MIP
TO BE OR NOT TO BE
Risk Based MIP briefly went into effect in 2008 then Housing Bill HR 3221 placed a moratorium on it until September 30, 2009.  But by Sept 30 FHA had not issued any bulletins and FHA lenders have not been notified that Risked Based MIP had been reinstated.

last year in an MS-NBCinterview, Dave Stevens the new FHA Commissioner stated that while Risked Based UFMIP was being considered he did not feel it is needed.  So, it looks like FHA UFMIP will remain fixed.

Below Are Previous UFMIP guidelines