Beginning April 1, 2012, any buyer using FHA financing will be subject to higher mortgage insurance premiums. This will include first time buyers, repeat buyers, and anyone using the FHA Streamline Refinance program. Click Here to get preapproved before the increase occurs.
FHA loans are very attractive to potential buyers looking to put very little money down. Also, if the buyer has some credit issues, FHA is much more lenient. FHA loans have two parts to the mortgage insurance premium. First, there is an upfront mortgage insurance premium(UFMIP). Currently, that is 1% of the loan size and will be increasing to 1.75% of your loan size. This UFMIP is added into your loan so it is not actual cash brought to closing. However, you will be paying interest on that money for the next 30 years. The monthly mortgage insurance premium increase will not be as drastic and will be going from 1.15% to 1.25% for any 30 year term when a buyer chooses to put down 3.5%.
FHA will make the announcement very soon regarding the changes. If you plan on using FHA for your next home purchase, please click here
About the Author: Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage. Email Chuck at firstname.lastname@example.org or call 678-725-8076. Bonus: Click to get a free, no obligation preapproval. I love to work with my readers!