These include origination fees, servicing fees, closing costs, and mortgage insurance premiums
If the shock frequency of the abnormal event (the abnormal volatility of jump size) increases two standard deviations, while all other parameters are fixed, the mortgage insurance premium
should increase 0.
Costs financed: Initial mortgage insurance premium
In March 2012, FHA expanded the reduced mortgage insurance premium
program to include loans endorsed or insured prior to June 1, 2009.
The upfront mortgage insurance premium
is now 2 percent of property value regardless of how much the borrower draws.
The growth rate is equal to the initial interest rate plus the lender's margin, plus the ongoing mortgage insurance premium
that goes to the Federal Housing Administration (FHA).
These benefits, that include the state and local sales tax deduction, mortgage insurance premium
deduction, educator expenses deduction, tuition and fees deduction and the mortgage debt relief tax benefit, are often referred to as the extenders because they are part of proposed legislation that would extend up to 55 tax breaks that expired last year.
1: The original principal amount of the existing FHA mortgage, in addition to new front mortgage insurance premium
Under the new rules, borrowers must pay an increased upfront mortgage insurance premium
Specifically, the proposal would create a zero-downpayment FHA home mortgage program for families with poor credit that would pay for itself by charging borrowers a higher mortgage insurance premium
12) For example, the FHA insures mortgages that require smaller down payments and, unlike PMI companies, the FHA allows the borrower to finance both closing costs and the mortgage insurance premium
Castro singled out as a positive step the reduction in the FHA mortgage insurance premium
(MIP) this year and offered some numbers to support the impact it has had on the market.