FHA mortgage insurance increase April 1, 2012

Yesterday there was an announcement from HUD and it appears that FHA will be increasing the mortgage insurance premium expense for case numbers ordered after March 31st.

  • For 3.5% down, the current cost is 1.00% for the “lump sum” premium and 1.15% for the monthly. After 3/31 the cost will be 1.75% and 1.25% monthly.
  • On a $350,000 home, this will equate to $2,533 in additional up front premium and a $28 higher monthly payment. If my math is correct here, this is a significant hit to buyers.

Many thanks to http://brianyotz.com/about/ for the update.

If you are currently pre-approved for an FHA mortgage now would be a good time to have a conversation with your mortgage professional.