Last Friday, the Obama Administration came out with its proposal for GSE reform. That proposal mentioned the likelihood that FHA would increase its annual mortgage insurance premium by .25%. For some reason I thought that likelihood would be sometime further in the future.
Not so far in the future.
FHA announced today that annual mortgage insurance premiums would increase effective April 18, 2011. The annual premium is used to calculate the monthly amount added to the mortgage payment.
In October 2010, FHA increased the annual mortgage insurance premiums for 30 year term loans from .5% to .9%, almost doubling.
This new increase will add .25% to the annual premium. Here is a comparison of the different levels that FHA loans have had since September 2010.
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Monthly mortgage insurance for |
Prior to October 2010 |
After October 2010 |
After April 18, 2011 |
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$150,000 loan amount with maximum financing |
$62.50 |
$112.50 |
$143.75 |
Additionally for 15 year terms mortgage insurance will be increased. For 15 year loans under 90% LTV FHA is adding mortgage insurance premium. Previously these loans did not require annual mortgage insurance.
The Obama administration has stated as one of its goals for Housing Finance Reform to raise the cost of government support for mortgage lending so that private capital will take over a much larger market share.
They however appear not to be waiting for a public debate on this.
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Thank you for visiting. This is the professional blog for |
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Richard Smith |
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Cell phone: 423-280-0345 Email: Richard@HomeLoansChattanooga.com |
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Thank you for visiting. This is the professional blog for |
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Richard Smith Conventional, FHA, FHA 203k, HUD $100 down purchases, VA, Jumbo VA, Rural Development, Jumbo, FannieMae Homepath, Home Equity Line of Credit (HELOC). |
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Stearns Lending, Inc |
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Cell phone: 423-280-0345 Email: RSmith@Stearns.com |
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Visit my website to inquiry about a home loan. |
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Read my most recent articles in Scotsman Guide. |
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This blog represents the opinions of Richard Smith. The posts and comments written on the blog do not represent the opinions or positions of Stearns Lending, Inc. |
Hi Richard - FHA is starting to get out of control with their costs. Their goal of pushing people away from FHA will be realized.
Everything coming out of DC these days seems Anti Real Estate, up coming legislation will also cause big bumps up in rates as well, all the more reason to buy today before the costs increase.