Changes in FHA Monthly Mortgage Premium
I received an email from Tammi Lewis of 1st Mariner Mortgage regarding the increase in the FHA monthly mortgage premium.
In an effort to further strenghten FHA's role in providing financing to buyers, HUD is increasing the monthly mortgage insurance premium by a .25 point. Right now, if a buyer places 3.5% down and uses FHA financing, they will pay a monthly mortgage insurance premium of .90. Effective for case numbers assigned on or after April 18, 2011, the new monthly mortgage insurance rate will be 1.15.
Let's take a look at how this will affect a buyer's monthly mortgage payment. If a buyer was purchasing a $200,000 home today and using FHA financing, they could expect to pay $144.75 for the monthly mortgage insurance. After this new change takes place, they will now pay $184.96 in monthly mortgage insurance which is a $40.00 increase in their payment.
Remember, as with any changes that are made to the mortgage insurance premiums, they are effective the date the case number is pulled and NOT the contract ratification date. So, my advice is to have the case number pulled for any buyer that looks like they will have a contract accepted around the mid-April timeframe so they will receive the lower monthly MI rate.
Buying or Selling a Home in Northern Virginia? Please contact Kim Darwaza of RE/MAX Allegiance for all of your Real Estate needs at 703-856-2254 or kim@kimdarwaza.com. To search the MLS for available listings please visit http://www.kimdarwaza.com.