June 22, 2017

FHA Home Loans Insurance Premium Increase April 2012

FHA loan structure has two mortgage insurance premiums to consider with this home loan program.  Both mortgage insurance premiums are set to increase in April.  If you are a Seattle real estate buyer who is pre-approved to purchase with FHA at 3.5% down please read the important updates.

HUD has stated starting April 1, 2012 the Upfront Mortgage Insurance Premium (UFMIP) for FHA financing would be increasing from 1.00% to 1.75%.  The UFMIP is a fee that can be paid in full at closing or in most situations is rolled into the start loan amount.

FHA loan structure also has an annual mortgage insurance premium (MIP).  This monthly mortgage insurance is paid each month with your mortgage payment.  FHA will increase the MIP .10% higher.  The current MIP is 1.15% with 3.5% down (30yr fixed) and it will increase to 1.25% with 3.5% down.

“FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month.  These marginal increases are affordable for nearly all homebuyers who would qualify for a new mortgage loan.  Borrowers already in an FHA-insured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.

Taken together, these premium changes will enable FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund, contributing more than $1 billion to the Fund, based on current volume projections through Fiscal Year 2013.”

Please contact us directly with questions regarding this change.  In the past 12 months Government financing has become more expensive compared to other financial opportunities currently available.  If you are pre-approved and would like to see alternative home loan programs contact us.   We will provide the options and feedback to best fit your real estate financial goals.

Government HUD link




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  1. Carlos says:

    What other “financial opportunities” are available that are cheaper than government loaning? And do they also offer down payment assistance as some government programs do? I am currently pre approved (FHA) and am dealing with the frustration of finding slim to no FHA approved complexes in my area. another option would be great.

    • sfujita says:

      Carlos you might be able to see if you are eligible for the Washington State Bond program. If you have questions, I can refer you to someone who teaches the class.

      I know you mentioned you are FHA pre-approved but are having a difficult time finding available homes. Are you able to put 5% down for conventional financing? Conventional would open up your options.

      Please contact us directly and we can provide further specific answers to your questions. email: info@mortgagereel.com

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