FHA Loans Will Cost More After April 18, 2011
The FHA Mortgage Insurance Premium (MIP) will increase 25 Basis Points
Instead of paying the current rate of .9 % of the loan amount, and then dividing that by 12 to reach the amount of MIP paid monthly, the new calculation will be 1.15 % of the loan amount divided by 12 to equal the monthly payment.
Example: $250,000 Mortgage Loan
.9 % Calculation: $250,000 X .009 = $2,250 /12 = $187.50 per month
1.15% Calculation: $250,000 X .0115 = $2,875/12 = $239.6 per month
This is an increase of $52.00 per month!
The upfront mortgage insurance premium (UFMIP) amount will remain unchanged at this point and remain at the current rate of 1.0% of the loan amount.
These changes will affect monthly mortgage payments and mortgage qualifying!
If you have been prequalified to purchase a home and have not yet found the right one, take a more serious approach to looking now and purchasing one before April 18th! After April 18th, the mortgage payment will be more and you will need to update your mortgage pre approval to reflect these new MIP monthly premiums.
Contact your REALTOR for more information! Contact your Mortgage Representative for more information! Mortgage Interest Rates are still near historic low levels! Home prices have become more affordable!