Mortgage Lender Prepares For Increase In FHA Mortgage Insurance Premiums By Encouraging Prospective Buyers and Homeowners To Take Action Now

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RANLife Home Loans, a lender based out of Salt Lake, UT, is responding to the FHA mortgage insurance premiums (MIP) changes by encouraging prospective buyers and existing homeowners to make a decision by acting now to avoid increasing rates.

FHA Mortgage Insurance Premiums, FHA Home Loan, FHA Refinance

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The changes will make it more expensive to have an FHA loan

RANLife Home Loans is a direct endorsed lender and is highly experienced in FHA home loans and refinances. Earlier this year, The Department of Housing and Urban Development (HUD) announced that FHA mortgage insurance premiums would not only be increasing, but becoming permanent. Since then RANLife has been encouraging borrowers wanting to buy a home and homeowners with an existing FHA loan to take action now and avoid paying more on their monthly mortgage payment.

Two changes will be taking effect to FHA mortgage insurance, the first happening right around the corner. As of April 1, 2013, FHA backed mortgages will be subject to an MIP increase of 10 basis points (BPS are basis points, or 1/100th of one percent) annually. The increase applies to all loan terms, including 15 and 30 year fixed rate FHA loans .

While 10 basis points is not a massive increase, borrowers will be able to recognize a difference in their monthly mortgage payment. For someone with a $200,000 loan amount, after the new changes their monthly mortgage payment will increase by almost $17/month and $200/year.

There are still a few days to avoid this increase, contact us today.

The second set of changes are quite more substantial as FHA is reversing the policy that allows FHA backed homeowners to cancel mortgage insurance premiums once the outstanding principal balance of an FHA loan reaches 78% of the original balance. Beginning June 3, 2013, MIP will stay on loans that start with a loan to value (LTV) of 90% or higher for the life of the loan. Also, for loans with an LTV of 90% or less, the new MIP will last 11 years.

FHA loans have been one of the country’s most inexpensive and readily accessible forms of mortgage financing since the program’s inception almost 80 years ago. A loan that was once designed for lower income families and first time homebuyers is becoming more expensive and amendments to the program could have the tendency to steer borrowers away towards programs with less expensive, private mortgage insurance options. CEO of RANLife Home Loans, Greg Walker, agreed by stating, “The changes will make it more expensive to have an FHA loan and it will cause more home buyers to qualify through conforming loans rather than government loans."

The good news, it's the best time to save on an FHA loan and it’s not too late to avoid these changes. Borrowers unable to close on a home loan or refinance before these two deadline dates will be assigned an FHA case number to exclude them from these changes. With a qualified representative at RANLife Home Loans homebuyers and homeowners can get their FHA case number assigned to them today, saving them money for the future years to come.

Founded in 2001, RANLife Home Loans, is a mortgage lender based out of Salt Lake, UT, that provides a fast, personalized solution to obtaining a home loan or refinance. Great service, with great rates. This is RANLife's commitment we provide to all of our customers. For more information on RANLife Home Loans, please visit

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Adam Hamilton
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