Sonoma County Mortgages

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now
  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • Scott Sheldon
    • Scott Sheldon
      Senior Loan Officer
      NMLS ID# 287389
      Direct: 707 217-4000
      Scott.Sheldon@nafinc.com
      Specializing in Residential Home Loans for Primary Residences, Second Homes, Investment Properties, Single Family Homes, Condos, PUDs, 1-4 Units.

Get Your Latest Rate Quote Now!

FHA Home Loans: Mortgage Insurance Premiums Set To Rise!

March 12, 2012 by Scott Sheldon

Share on Facebook
Facebook
Tweet about this on Twitter
Twitter
Share on LinkedIn
Linkedin
Pin on Pinterest
Pinterest
Email this to someone
email
Print this page
Print

Thinking about purchasing or refinancing using the Sonoma County mortgage? If yes, the mortgage insurance premiums on FHA Home Loans are set to rise again on April 1. The Federal Housing Administration continues to keep a close eye on their capital reserves and as a result, have instituted higher costs on FHA Home Loans originated on or after April 1, 2012.

The mortgage insurance premiums are set to rise in purchase loans and in refinance transactions. Following are the changes:

→UFMIP (upfront mortgage insurance premium) presently at 100 basis points will rise to 175 basis points

→MIP (monthly insurance premium) presently at 115 basis points will rise to 125 basis points

Here is how the math breaks down on your FHA home loan preapproval:

Assumptions all other items constant-

Purchase Price for $350,000

Down Payment 3.5%

Interest Rate 4.0%

→Total Mortgage Payment $2367

→Total Mortgage Payment on or after April 1, 2012 $2407

When the mortgage insurance on FHA Home Loans increases the purchasing power decreases.

Our scenario represents a mortgage payment difference of $40 per month. $40 per month might not seem like a lot of additional payment, however the cost of the mortgage inherently changes. Here’s why:  We were using a 4% interest rate. The payment is increases by $40 per month thereby making the effective interest rate more like 4.25%. So in essence your effective mortgage rate post April will be .25% higher.

As the mortgage insurance premiums continue to rise, purchasing power will ultimately be reduced to offset the higher mortgage insurance premiums on all FHA Home Loans moving forward. The change of $40 per month in our scenario reduces the purchasing power by approximately $20,000.

As a Sonoma County first time home buyer here is how you will need to adjust to these changes:

→Reduce your purchase power to the tune of $20,000

→If you have monthly revolving debt, reduce this by $40 per month or the equivalent with your own individual purchase price scenario

→ Switch loan programs. If you can,  consider switching to USDA financing. Consider conventional financing, the requirement 5% down on a primary residence

→Reduce the interest rate you’re receiving from the mortgage lender

FHA Home Loans still provide a very flexible approach to qualifying despite the changes to the mortgage insurance premiums.

Speak with your loan officer as soon as possible to make sure these changes are accounted for in your home loan pre-approval. It’s likely that as the Federal Housing Administration along with HUD will continue to closely watch their capital reserves meaning the mortgage insurance premiums will probably continue to rise even beyond April.

Begin by getting a complementary mortgage rate quote, get pre-approved, find a house, lock in a historically low mortgage rate and close escrow as soon as possible. The mortgage insurance on FHA Home Loans is set to rise April 1, 2012.

 

 

 

 

 

 

 

Related Mortgage Advice from Scott Sheldon

  • FHA Mortgage Insurance Premiums Now .85%

    The mortgage insurance premiums on FHA loans has now been reduced .85%. This represent more…

  • How FHA Home Loans Work

    How do FHA Home Loans Work? FHA Home Loans are the most popular loan program…

  • Understanding FHA Home Loans

    The two types of loans offered by a local mortgage lenders are conventional loans and…

  • Sonoma County Home Loans: Mortgage Insurance 101

    Mortgage Insurance is the dreaded monthly cost mortgage lenders put on borrowers looking to purchase…

Filed Under: First Time Home Buyers, Loan Programs

Latest Video Tips

sonomacountymortgage

We are looking for an experienced, energetic, fun ...

Feb 6

Open
We are looking for an experienced, energetic, fun and dynamic individual to join our Santa Rosa Branch for New American Funding.

This person would be have specific recent mortgage experience, know the loan business including guidelines and be willing to go the explore mile. If you know someone like that please feel free to message me.

@nafmidpacificregion
@stylemyheart @newamericanfunding #talent #hiring #fun #talent #looking #team #crew #building #family #santarosa #sonomacounty

We are looking for an experienced, energetic, fun and dynamic individual to join our Santa Rosa Branch for New American Funding.

This person would be have specific recent mortgage experience, know the loan business including guidelines and be willing to go the explore mile. If you know someone like that please feel free to message me.

@nafmidpacificregion
@stylemyheart @newamericanfunding #talent #hiring #fun #talent #looking #team #crew #building #family #santarosa #sonomacounty
...

sonomacountymortgage

Every family we meet with gets this super handy ...

Jan 30

Open
Every family we meet with gets this super handy packet. We like families to have something tangible when it comes to financing a home. You won't find this type of service with a Rock Loan company or an internet lender...🤔 @nafmidpacificregion @nikki___perfectly_imperfect83_ @_gorjessxo #family #team #value #rates #mortgage #goals #homes #realestate

Every family we meet with gets this super handy packet. We like families to have something tangible when it comes to financing a home. You won't find this type of service with a Rock Loan company or an internet lender...🤔 @nafmidpacificregion @nikki___perfectly_imperfect83_ @_gorjessxo #family #team #value #rates #mortgage #goals #homes #realestate ...

sonomacountymortgage

My little sweet pea loved the award dad earned for...

Jan 18

Open
My little sweet pea loved the award dad earned for having a record year. #families 
#mortgage #kids #family #team #goals #success #year #2019 
@nikki___perfectly_imperfect83_ @_gorjessxo @nafmidpacificregion @nafsantarosa @tinalsheldon

My little sweet pea loved the award dad earned for having a record year. #families
#mortgage #kids #family #team #goals #success #year #2019
@nikki___perfectly_imperfect83_ @_gorjessxo @nafmidpacificregion @nafsantarosa @tinalsheldon
...

Popular Posts

Why your income is your lifeline to finance a home

Why your income is your lifeline to finance a home

Filed Under: Credit Score Questions and Answers, Economic News, First Time Home Buyers, Jumbo Loans, Loan Programs, Loan Qualifying, Mortgage Shopping, Mortgage Tips & Advice, Popular

2020 Conforming Loan Limits Increaase

New loan limits for 2020 makes getting a mortgage easier

Filed Under: Economic News, First Time Home Buyers, Interest Rates, Mortgage Shopping, Mortgage Tips & Advice, Popular, Pre-Approval

Why the purchase price in a real estate transaction should not be the single most important factor

Why the purchase price should not be the single most important factor

Filed Under: Credit Score Info, Economic News, First Time Home Buyers, Interest Rates, Invesment Properties/Second Homes, Jumbo Loans, Loan Programs, Loan Qualifying, Mortgage Shopping, Mortgage Tips & Advice

How to avoid getting a jumbo loan due to Coronavirus

Here are 2 mortgage process problems you will want to avoid

Filed Under: Credit Score Questions and Answers, Interest Rates, Loan Programs, Loan Qualifying, Mortgage Shopping, Mortgage Tips & Advice, Popular, Pre-Approval, Purchase Mortgage Loans Questions and Answers

Self Employed Borrowers

Here is a legit non-traditional income program for self-employed mortgage borrowers

Filed Under: Credit Score Info, Economic News, First Time Home Buyers, Interest Rates, Loan Programs, Loan Qualifying, Mortgage Shopping, Mortgage Tips & Advice

How to use seller carry financing to purchase a house with less cash down

Should you buy & build or buy a single family home?

Filed Under: First Time Home Buyers, Interest Rates, Loan Programs, Loan Qualifying, Mortgage Shopping, Mortgage Tips & Advice, Pre-Approval

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

SCM on Facebook

SonomaCountyMortgages.com

Location & Contact

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
1450 Neotomas Ave Suite 115
Santa Rosa, CA 95405
1-707-217-4000
Email Us!

Copyright 2021 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing | Privacy | Terms of Use | Electronic Consent Agreement

Connect With Scott In Your Inbox

Looking for a home? Real estate insider? Get connected with Senior Loan Officer Scott Sheldon. Scott stays updated on the latest in the mortgage industry, so you can stay updated with him!