FHA MIP changes effective October 4th, 2010: 6 things you need to know

FHA MIP Changes Now Official
With the passing of H.R. 5981 and the resulting Public Law 111-229, FHA was given authority to change the amount charged to borrowers for both the Up Front and the Annual premiums. These changes as outlined in Mortgagee Letter 2010-28, are effective for all case numbers assigned on or after October 4th, 2010.

Here are the 6 things you need to know about these changes:

1. The Up Front premium is now 1.0 % for all standard FHA programs (purchase money mortgages, full credit-qualifying refinances, streamline refinances)
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2. The Annual premium is now .90% for LTVs GREATER than 95% on 30 year loans
   
   
3. The Annual premium is now .85% for LTVs EQUAL to or LESS than 95% on 30 year loans
   
   
4. The Annual premium is now .25% for LTVs GREATER than 90% on 15 year loans
   
   
5. The Annual premium is now .00% for LTVs EQUAL to or LESS than 90% on 15 year loans
   
   
6. These premiums apply to purchases, regular refinances and streamlines

Please note that this new law also gives FHA the authority to raise the Annual premium at will up to 1.5% for LTVs at or below 95% and 1.55% for LTVs more than 95%.

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Tiger Woods Takes Out $54.5 Million Mortgage For New Mega-Mansion

Hot on the heels of his highly public divorce, Tiger Woods reportedly took out a $54.5 million dollar mortgage for his new Florida mansion.
The troubled golfer filed the legal docs for the massive mortgage earlier this week, according to TMZ.com, and reportedly listed himself as a “single man”.
The home, located on the exclusive Jupiter Island, will reportedly have a tennis court, oxygen therapy room, many pools and a fitness center. The loan should be repaid by 2016, reports the site.

Reverse Mortgage (HECM) for purchase of a home

For additional information about the HECM for Purchase Program, call me.  Here is an excellent article to give you information to get started...

HECM for Purchase

Beginning on January 1, 2009, seniors became eligible to use a reverse mortgage to purchase a principal residence as part of HUD’s “HECM for Purchase Program.”

Definition (plain English)

HECM reverse mortgages are now available to seniors who would like to buy a new home if:

• The youngest homeowner is age 62 or older
• The purchased home will be primary residence
• The purchased home will be occupied within 60 days of closing
• No mortgage loan other than the HECM can be used to buy the purchased home
• The difference between the purchase price of the home and the HECM proceeds must be paid in cash or from the sale of an existing home

Definition (formal)

HUD’s formal definition of the program, from the HUD Mortgagee Letter on October 10, 2008, is:

The HECM for Purchase is a real estate purchase where title to the property is transferred to the HECM mortgagor, which the mortgagor will occupy as a principal residence, and, at the time of closing, the HECM first and second liens will be the only liens against the property. HECM mortgagors must occupy the property within 60 days from the date of closing. Lenders are required to ensure all outstanding or unpaid obligations incurred by the prospective mortgagor, in connection with the HECM transaction, are satisfied at closing.