HUD has confirmed that the annual mortgage insurance premiums will rise as of
April 1, 2013. The change is effective by the date the FHA case number is received,
and not the application date.
The increases are as follows:
10 basis point increase in premium for annual mortgage insurance from 1.25 to
1.35 for loans of greater than 15 years
A payment will increase approximately $12.50 for a $150,000 loan.
Effective June 3, 2013, the FHA will now no longer cancel paying monthly insurance
premiums when the outstanding principal balance has been reduced by 22%
(78% of original). Instead, borrowers will pay the monthly premiums for the entire
life of the loan on loans with maximum financing and a loan term greater than
15 years. Loans with a 15 year term or less will pay the monthly insurance premium
for 11 years.