FHA loans are about to get more expensive

Uh-oh.  Here's from lender Dana:

Hey Everyone … if you have clients looking to purchase with FHA loans, this might motivate them to buy before rates start going up.    The monthly premium amounts are going to be raised and also the up-front mortgage premium.   Sounds like it’s going to start happening in April and June:

FHA to Increase UFMIP to 1.75 for New FHA Loans
As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans. FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount. Upfront premiums (UFMIP) will also increase by 0.75 percent.

These premium changes will impact new loans insured by FHA beginning in April and June of 2012. Details will soon be published in a Mortgagee Letter to FHA-approved lenders.

“After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante. “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

FHA loans are about to get more expensive Rating: 4.5 Diposkan Oleh: jembe