FHA Mortgage Insurance Premium Increasing

Just the other day, FHA Commissioner David H Stevens announced changes for FHA Mortgage Loans. These changes are for any FHA loans that are assigned case numbers on or after April 18, 2011.

FHA Loans Will Cost More After April 18, 2011
The FHA Mortgage Insurance Premium (MIP) will increase 25 Basis Points

Instead of paying the current rate of .9 % of the loan amount, and then dividing that by 12 to reach the amount of MIP paid monthly, the new calculation will be 1.15 % of the loan amount divided by 12 to equal the monthly payment.

Example: $250,000 Mortgage Loan
.9 % Calculation: $250,000 X .009 = $2,250 /12 = $187.50 per month
1.15% Calculation: $250,000 X .0115 = $2,875/12 = $239.6 per month
This is an increase of $52.00 per month!

The upfront mortgage insurance premium (UFMIP) amount will remain unchanged at this point and remain at the current rate of 1.0% of the loan amount.

Is affects monthly mortgage payments and mortgage qualifying If you have been prequalified to purchase a home and have not yet found the right one, take a more serious approach to looking now and purchasing before April 18th! After April 18th, you will need to update your mortgage pre approval to reflect these new MIP monthly premiums.

Contact your REALTOR for more information! Contact your Mortgage Representative for more information! Why wait longer if you are a First Time Buyer and will be obtaining a FHA Mortgage to purchase a home!