…before the higher mortgage insurance premiums kick in.
I’ve been alerted by multiple lenders this week regarding the new FHA mortgage insurance premiums set to become effective April 1.
For loans under $625,000 FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent (from 1.15 percent to 1.25 percent), and will increase its upfront premium (UFMIP) by 0.75 percent (from 1 percent to 1.75 percent of the base loan amount).
See all the details in the HUD press release: FHA TAKES ADDITIONAL STEPS TO BOLSTER CAPITAL RESERVES
It is anticipated that this yield cost will actually equate to .375% to .5% in additional cost to the borrower. See Home loan costs to increase.
These changes are effective for all FHA case numbers assigned on or after April 1, 2012, so if you’re in the market for a new home and you’re planning on financing via FHA, you may want to find your new house in March.