FHA Costs on the Rise…
The Federal Housing Administration (FHA) unveiled a plan on Monday, February 27, 2012, to increase the cost of FHA new purchase financing by raising what borrowers pay for FHA mortgage insurance.
What Will This Mean for Homebuyers?
Plain and simple: the cost to purchase a home using FHA financing is about to become more expensive. Starting with FHA case numbers assigned on or after April 1, 2012, FHA will hike its upfront mortgage insurance premium (UFMIP) by 75 basis points to 175 basis points on all singlefamily loans. For an average $150,000 FHA loan, this would increase the total loan amount by over $1,100.
Also rising is the annual mortgage insurance premium (MIP), which will escalate by 0.10 percent. This is paid monthly by the borrower.
What Steps Do Buyers Need to Take?
Homebuyers in the market should act quickly to avoid these higher costs. If you’ve been “on the fence” about buying, now is the time to take action. Find that dream home, sign a sales contract and get your application in the works with your lender as soon as possible to avoid these costlier premiums.
