Monthly costs for FHA loans are going up. Laws have been passed that give FHA the ability to charge more for monthly mortgage insurance costs, while the same laws also will drop the amount of their Up-front mortgage insurance premium. This will over all cause the monthly payment to increase for any new loans after October 4th 2010.
This is important because if you are looking for a home, know someone who is looking for a home, or have a client who is looking for a home, please let them know that if they fail to act, it may cost them thousands of dollars.
Here is an example:
200,000 purchase with 3.5% down, and assuming an interest rate of 4.5%
Current rule
Principle and interest payment - $ 999.90
Monthly amount for annual premium - $ 87.81
Total $1087.71
New rule
Principle and interest payment - $ 987.68
Monthly amount for annual premium - $ 143.69
Total $1131.37
I could get real technical on the details, however, they are truly not that interesting. If you need some bedtime reading material, please Click here to read the full details as disclosed by our friends at HUD.
If you have any questions on this topic, or if you are looking for someone to help you with your loan, or have a client who may need expert advice, please contact me today.
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