Congress extended the “Temporary Loan Limit” of $729,750 through 2011. This is good news for those of us in the Bay Area where housing prices are so high. This news, however, was probably met with a yawn from brokers in Topeka, Kansas.
FHA Up Front Mortgage Insurance Premiums (Up Front MIP) go down on Monday from 2.25% to only 1.0% of Loan Amount, as we have mentioned.
We are reminding people now that these Premiums can be paid in THREE ways: (1) The borrower can “finance them” by simply adding the amount to the loan. This has no affect on the LTV guidelines – loans with financed MIP can exceed 96.5% LTV; (2) Borrowers can pay for the Premiums at close, “out of pocket”; or (3) The SELLER can pay for the Premiums. FHA still allows for 6% Seller Credits. Such large credits (associated with high purchase prices) are often more than enough to cover ALL closing costs as well as Up Front MIP.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167