Just wanted to pass along some news about the new FHA mortgage insurance premiums set to go into effect on April 1. This is going to affect Parker CO Home purchases as well as Castle Rock, Elizabeth, and the whole country of course.
In order to shore-up FHA's financial reserves because of the cost of foreclosures HUD announced they will increase FHA's mortgage insurance premiums on April 1, 2012. The fee increases will drive up the cost of buying a home. Here is what is happening:
1) The annual mortgage insurance premium (paid as part of the house payment) will increase from the current 1.15% to 1.25% of the loan amount. On a $200,000 purchase price the increased fee would result in the monthly house payment going up by approximately $16.
2) FHA's Up-Front Mortgage Insurance Premium (financed into the mortgage) will increase from 1% to 1.75% of the loan amount. On a $200,000 purchase price this would result in an increase of the loan amount of $1,447 to the homebuyer. Because of the increase to this fee, and loan amount, the monthly payment on a $200,000 purchase price would rise by almost $7 per month based on a 3.750% 30-year fixed interest rate.
Added together, the monthly payment for a $200,000 home with the minimum down payment would rise by about $23 per month.
Even with the fee increases, FHA is still a great way for buyers to purchase a home with a minimal down payment.
Notice that the change goes into effect on April 1st. That is the day by which we have to have received the FHA case number. In order for your clients to beat the deadline they will need to have an accepted contract by about the 27th or 28th of March.
Granted the monthly effect is not huge but it will affect some buyers who are already on the edge of qualifying.