FHA mortgage-wise at least.

 

Due to a shortage in the Mutual Mortgage Insurance Fund, The Federal Housing Administration is increasing insurance premiums on FHA loans effective April 1st. The increase in upfront premium will be from 1 percent to 1.75 percent of the base loan amount. The changes in annual mortgage insurance premiums will be staggered, with an increase in the premium for loans under $625,500 increasing by 0.10 percent as of April 1, and the premium for loans above that amount increasing by 0.35 percent as of June 1. Calculated on a $250,000 FHA loan, the upfront premium will increase from $2,500 to $4,375 and the monthly PMI will increase modestly. Typically the upfront premium can be rolled into the mortgage and paid on a monthly basis, but these changes have made an already expensive FHA loan even more so. If a lender has an FHA case number assigned prior to April 1st the current insurance premiums will apply.

 

The advantage to FHA loans is that the borrower is only required to come up with 3.5% of the purchase price as a down payment, while a conventional loan requires at least a 5% down payment. However, if the buyer has any way of coming up with the extra 1.5% of down payment a conventional loan is a much more cost effective option with no upfront insurance premium.

 

THIS MEANS IF YOU ARE AN FHA BUYER YOU BETTER GET A HOME UNDER CONTRACT BEFORE APRIL 1ST!