Friday, March 2, 2012

FHA Upfront Mortgage Insurance

The cost of obtaining an FHA loan just got higher... FHA announced on February 27th that the FHA upfront mortgage insurance rate will be increased from 1% to 1.75% for new loans as of April 1st, 2012. In addition to the increased upfront rate, the monthly mortgage insurance fee will also go up 10%. While it seems natural to complain about the increase, FHA advises that the increase to the upfront premium will cost new borrowers an average of approximately $5/month. This isn't too much to ask considering that FHA has paid $37 billion in claims related to defaulted mortgages since 2008. How can you get around this increase? Pursue an FHA loan and have a case number assigned prior to March 30th, 2012! Call us if we can help you find the perfect property or if you would like lender recommendations!

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