Friday, April 6, 2012

FHA Premiums May be Going Up, But a Loan Officer Offers a Way Out

Starting next Monday on April 9, FHA upfront mortgage insurance premiums will rise from 1 percent to 1.75 percent of the base loan amount, and the annual mortgage insurance premium will rise by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount.

Even if one hasn’t applied for a loan just yet, Dan Green, loan officer with Waterstone Mortgage in Cincinnati and author of, said by getting an FHA loan registered by April 9, one can avoid paying those premiums.

“To register an FHA loan simply means to have an FHA Case Number assigned to it. You don’t have to lock a mortgage rate and you don’t even have to choose a particular lender to work with,” Green said in his blog.

In order to get an FHA Case Number, Green said you just need a name, social security number, property address, and a few other small details.

To get a better understanding of how this works and what it could mean, Green answered questions from DS News.

DS News: Do you know what the estimated monthly or yearly savings is for a borrower if they do get an FHA Case Number by April 9?

Dan Green: The savings will vary based on loan size. For every $100,000 borrowed, an FHA mortgage applicant will save $750 at the time of closing, and $100 per year.

DS News: How long does it take for a loan officer to get an FHA Case Number?

Dan Green: Lenders can request FHA Case Numbers from the FHA with nothing but a complete mortgage loan application in-hand.

DS News: How long is the FHA Case Number good for? For example, what if you get the number but don’t actually look into getting a loan until months later?

Dan Green: FHA Case Numbers expire after 6 months of non-activity.

DS News: If you don’t have a loan officer to work with already, can people just call a lender and ask for a loan officer to get a number or does it need to be someone you are planning to get a loan from as well?

Dan Green: FHA mortgage applicants can transfer FHA Case Numbers from lender-to-lender.

Source Esther Cho

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