FHA Mortgage Insurance Premiums are about to change again

Hard to believe all the changes that continue to come out from HUD regarding the FHA mortgage insurance fund but the reality is that more and more people are using FHA as the primary financing choice in today’s market.    The new rules go into effect on all case numbers pulled on and after September 7th, 2010.  This is a good and a bad thing.

The good part- the upfront mortgage insurance premiums are going to go DOWN, yes I said down from 2.25% of the loan amount to 1%.  So on a $300,000 loan amount your total upfront mortgage insurance premium right now is $6750 but with the new premiums it wil actually go down to $3,000.  This part is great since I can not tell you how many people stayed away from FHA specifically for this purpose.

Now the bad news- the annual mortgage insurance is going UP, yep that is correct- it is going from its current levels of .50-.55 monthly to .85-.90 and the worst part is that it could go up again in the near future if HUD decides that it wants to take it up.  So what does that mean to you- here is how it translates out:

On that same $300,000 loan under the current  premiums your monthly mortgage insurance would be $122 per month and with the new premiums that start September 7th the monthly would be $207 per month.  That’s an $85 per month increase!!!!

The idea of FHA being here to help customers and save them money is really not the case as much as it used to be- so the point is if you have been sitting on the fence trying to decide whether to refinance or to purchase that new home- its time to get a move on or it will cost you more come September 7th!

Please feel free to call us at Village Home Mortgage and we can help you to get you into the perfect loan for you.  Call toll free at 888-790-0292

Village Home Mortgage just had our Better Business Bureau rating increased to and A+                                                                                      Can your lender offer you that type of customer support?

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