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