FHA will increase its annual mortgage insurance premium for Kentucky FHA MortgagesÂ beginningÂ in early 2013. For example, for most newÂ Kentucky FHA mortgagesÂ by 10 basis points, or 0.10%. Premiums on jumbo mortgages â€” $625,000 or larger â€” will also increase by 5 basis points, or 0.5%, to maximum authorized annual mortgage insurance premium. These increases exclude certain Kentucky FHA streamline refinance transactions.
Now the big change. It use to be you only paid the annual mip for 60 months or 78% ltv, but now Â FHA will also requireÂ mostÂ KentuckyÂ FHA Â borrowersÂ to continue paying annual premiums for the life of their mortgage loan.
In 2001, the FHA cancelled required MIP on loans when the outstanding principal balance reached 78% of the original principal balance. However, FHA will remain responsible for insuring 100% of the outstanding loan balance throughout the entire life of the loan, a term which often extends beyond the cessation of these MIP payments.
For credit scores below 620 now, FHAÂ is Â requiring manual underwriting on loans with decision credit scores below 620 and DTI ratios over 43%, raising down payments on loans above $625,000, access to FHA after foreclosure and continuing efforts to improve risk management. There is still a 3 year waiting period for foreclosures and 2 years for a bankruptcy with no lates afterÂ bankruptcies. IF you have lates after bankrupcty , it will be hard to get a mortgage loan again.
The FHA will also step up its efforts for approved lenders with regard to aggressive marketing to borrowers with previous foreclosures, while also reminding lenders of their duty to fully underwrite loan applications. All new loans must meet FHA guidelines.
FHA will announce a proposal to increase down payment requirements for mortgages that have original principal balances above $625,000. The minimum down payment requirement for these mortgages will increase from 3.5% to 5%.
Additionally, theÂ FHAÂ will require lenders to manually underwrite loans of which borrowers have a credit score below 620 as well as a total debt-to-income ratio greater than 43%. Thus, lenders will be required to document compensating factors supporting underwriting decisions to approve loans where parameters are exceeded.
Joel LobbÂ (NMLS#57916)SeniorÂ Loan Officer 502-905-3708 cell 502-813-2795 fax email@example.com
Key Financial Mortgage Co.Â (NMLS #1800)* 107 South Hurstbourne Parkway* Louisville, KY 40222*