FHA Loan New Quick Update
As of April 18th 2011 all FHA loans will cost your clients more per month in mortgage insurance.
HUD continues to increase the cost of FHA loans. On Monday February 14th, HUD announced their decision to further strengthen FHA's Mutual Mortgage Insurance Fund (MMIF) by increasing the annual mortgage insurance premium by 25 basis points.
EXAMPLE: FHA NOW and LATER
using 5% interest rate (this is not a rate quote and to be used for educational purposes only)
Purchase Price: $200,000
Down Payment (3.5%): $7000
Principal and Interest: $1046
Home Insurance: $65
Mortgage Insurance: $145
Total Monthly Payment: $1380
As of April 18th the mortgage insurance on the above example would increase by $40/month to $185/month. This increase in addition to the increase in October 2010 has raised the cost of FHA mortgage insurance by almost $100 more per month on a $200,000 loan