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Mortgage changes that you need to know about concerning FHA and Fannie Mae & Freddie Mac

March is shaping up to be a big month in the mortgage industry due to recent changes that go into effect for FHA  insured loans and loans owned by mortgage giants Fannie Mae and Freddie Mac.  One change is bad news for consumers while the other is good news so let’s start with the bad news first.  FHA Commissioner, Carol Galante, announced a new premium structure for FHA-insured single-family mortgage loans: FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount. Upfront premiums (UFMIP) will also increase by 0.75 percent but this increase will still be allowed to be financed into the new loan. FHA estimates that the increase to the upfront premium will cost the average borrower about $5 more per month.  The premium changes will impact new loans insured by FHA beginning in April 2012.  If you are currently in the process of getting a loan and plan on closing after April 1st then these changes won’t apply to you as long as you have an FHA case number assigned prior to April 1st 2012.  Borrowers already in an FHA-insured mortgage will also not be affected by these new changes.  Any FHA case number assigned after April 1st 2012 will be subject to the new increases.

Now for the good news: The Home Affordable Refinance Program (HARP 2.0) officially rolls out on March 17th 2012.  HARP 2.0 is expected to help more than 1 million borrowers to refinance at today’s low interest rates even if falling home values have left them owing more on their loans than the homes are worth.  To be eligible, HARP applicants must have loans owned or guaranteed by Freddie Mac or Fannie Mae, have less than 20 percent equity and be current on their monthly payments.  Moody’s Analytics expects 1.6 million HARP refinances by the end of 2013, saving borrowers an average of $250 a month.  If you would like to see if your current loan is owned by either Fannie Mae or Freddie Mac, please visit the following websites and enter in your home address: http://www.fanniemae.com/loanlookup/ or https://ww3.freddiemac.com/corporate/  If your loan is owned by either Fannie or Freddie and you would like to take advantage of this refinance program, we encourage you to call us today because we are anticipating a slower response time than normal due to high demand.  To learn more about our company and mortgage products, please feel free to call Dan Longman, President of Priority Lending Corp, at 954-438-3776 ext.11 or email me at prioritydan@bellsouth.net.

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