FHA to Increase Cost of Up-Front Mortgage Insurance Premiums

If you are thinking about buying a home and utilizing an FHA-insured single-family mortgage loan, a new premium structure will be implemented April 2012 that will cost you more money. 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 increase by 0.75 percent (from 1 percent currently to 1.75 percent).  FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500 assigned on or after June 1, 2012.  FHA will still allow buyers to finance this charge through their mortgage and estimates that this increase will cost the Borrower an additional $5 per month on average. 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. Source:  © 2012 Florida Realtors®]]>