Ohio residents have less than 2 months before FHA drastically changes the policy on when FHA mortgage insurance premiums (MIP) can be cancelled. In February I covered the changes in Changes to FHA Mortgage Insurance Cancellation. The changes are effective with FHA Case Numbers assigned on or after June 3, 2013. You can read HUD Mortgagee Letter 2013-04 for the technical explanation.
Don’t wait until the last-minute. Generally lenders get back logged the week before a major FHA change, so it could take longer to assign an FHA Case Number. And don’t forget, you probably want to shop around for the best deal. All adding valuable time on to your mortgage search, and thus, when your FHA Case Number will get assigned.
I have been advising clients seeking a Ohio FHA mortgage, whether an FHA purchase mortgage, FHA refinance or FHA Streamline, that they need to plan on having a full application completed no later than May 23rd to insure that we can get their FHA Case Number assigned before the change.
To recap the change that is taking place.
Ohio FHA Mortgage Insurance (CURRENTLY)
- Must pay for a minimum of 5 years
- After 5 years, the FHA Mortgage Insurance is cancelled once your principal loan balance reaches 78% of the home’s value as determined by the last appraisal or purchase price
Ohio FHA Mortgage Insurance (new FHA Case Numbers assigned on or after JUNE 3, 2013)
- FHA loan taken out is 90% or less financing, you will pay mortgage insurance for the first 11 years or until the end of the mortgage term (whichever is shorter)
- FHA loan taken out is above 90% financing (which the majority are), you will pay mortgage insurance for the entire term of the mortgage or for the first 30 years (whichever is shorter)
This will add considerable costs to an FHA mortgage. If you would like to review your options you can CONTACT ME or complete the simple and free Ohio FHA Interest Rate Quote form. And, unlike many mortgage consultants, I am available evenings and weekends, so give me a call.
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