FHA to Raise Fees….Again!

In an attempt to fund their depleted reserves the Federal Housing Association will be raising 2 fees associated with FHA backed home loans.  As a reminder FHA mortgages are low down payment  home loans insured by the government.   The down payment for these loans can be as low as 3.5%.  In exchange for a lower down payment and other less stringent qualifying factors FHA has two added costs that are not found in other types of loan products.

One of these fee’s is  the Upfront Mortgage Fee.  This fee is stated as a percentage of the loan amount and can be paid either as a part of the closing costs or rolled into the loan. The second fee is called the Annual Mortgage Insurance Premium.  This fee is also stated as a percentage of the loan amount, but it is paid as part of the monthly mortgage payment.  Here are the expected changes:

Annual Mortgage Insurance Premium:

  1. April 1st, 2012–  Mortgages under $625,500 pay a premium of 1.25% of the mortgage amount (up from 1.25%)
  2. June 1st, 2012 – Mortgages above $625,500 pay a premium of 1.5% (up from 1.15%).

Upfront Fee’s

  • Will increase to 1.75% of the loan among.  That is up a whopping  .75%!

If you have questions how this will affect you please don’t hesitate to contact me.

 

 

 

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