Buying with an FHA loan? 

Ask your mortgage lender to get an FHA case number assigned to your file prior to April 1, 2013. 

Federal Housing Administration Commissioner Carol Galante announced a series of changes to be issued this week that will allow the agency to better manage risk and further strengthen the health of the Mutual Mortgage Insurance Fund.

FHA will increase its annual mortgage insurance premium for most new mortgages by 10 basis points, or 0.10%. Premiums on jumbo mortgages — $625,000 or larger — will also increase by 5 basis points, or 0.5%, to maximum authorized annual mortgage insurance premium. These increases exclude certain streamline refinance transactions. While this is not a huge increase, and will only change a buyer’s mortgage payment by a few dollars a month – the bigger kicker is that now mortgage insurance is required for the life of the FHA loan.

Previously, when the outstanding principal balance reached 78% of the original principal balance, you no longer were required to pay mortgage insurance. However, since FHA remained 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, they felt a change had to be made.  The MMI Fund has foregone billions of dollars in premium revenue on mortgages endorsed from 2010 through 2012 because of this automatic cancellation policy, the FHA’s Office of Risk Management and Regulatory Affairs said.

Want to avoid having MIP (Mortgage Insurance Premium) for the life of your mortgage loan?  Lock in and get an FHA case number prior to April 1, 2013.