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  • As a result of massive claims to the FHA insurance funds over the years of widespread defaults and foreclosures, the mortgage insurance premiums were increased dramatically over a period of time up until 2013 when they hit an all-time high. On January 9, 2015, HUD announced that the annual Mortgage Insurance Premiums would be reduced substantially, effective with new FHA case numbers issued January 26 and later (affects only 30 year terms.)

    Below is a chart of the current and new premiums. Borrowers may realize thousands of dollars in savings as a result of this change.

     Term of loan 

     Down-payment percentage 

     Previous annual MIP 

     New annual MIP 

    30 yrs

    Less than 5% down

    1.35%

    .85%

    30 yrs

    5% or more down

    1.30%

    .80%

    15 yrs

    Less than 10% down

    .70%

    .70%

    15 yrs

    10% or more down

    .45%

    .45%

    **

         

    **adjustable rate mortgages are amortized over 30 yrs, so the MIP is the same as that of a 30 year loan.

    The annual MIP is calculated once per year based on the new outstanding principal balance, and divided by 12 to reach the amount paid each month with your payment.

    Up front Mortgage Insurance Premiums will remain at 1.75% of the base loan amount. In the Philadelphia region, the base cannot exceed $379,500. So the maximum total loan amount would be that times 1.0175, or $386,141. Of course, the up-front MIP could be paid in cash, but it cannot be split and partially financed: all or nothing.