A new premium structure for FHA-insured single family mortgage loans was recently announced.* Beginning April 1, 2012, all FHA mortgage applicants will be subject to new fees. The up-front mortgage insurance premium, which is currently 1 percent of the loan amount and can be financed into a borrower’s loan, will increase to 1.75 percent of the loan amount. The FHA estimates that the increase to the upfront premium only will cost new borrowers an average of approximately $5 more per month.
In addition, the annual mortgage insurance premium that currently stands at 1.15 percent of the loan amount (for loans with more than 95% LTV) will increase to 1.25 percent, for loans up to $625,000. Additional increases are planned for loans above $625,000 effective June 1, 2012.
Taken together, these premium changes will enable the FHA to increase revenues at a time that is critical to its ongoing ability to remain a valuable option for low- to moderate-income borrowers.
If you have been contemplating purchasing a home with less than 20% down, You may want to fast track that purchase now to avoid possible increases in MI (Mortgage Insurance) fees. Plus Interest rates are incredible right now, home prices are more reasonable and really - What are you waiting for?
Call your Bank or Mortgage Broker today to get pre-qualified for a home loan. Then call a Professional Realtor to find that perfect home! Or call me and I will put you in touch with several local lenders.
*Information provided is based on the initial FHA announcement made February 27, 2012, and is subject to change. The FHA will publish the final mortgagee letter on the matter very shortly.
