Changes in FHA Mortgage Loans Coming April 18, 2011

| February 16, 2011 | 0 Comments

FHA Loans Will Cost More After April 18, 2011
The FHA Mortgage Insurance Premium (MIP) will increase 25 Basis Points

Just the other day, FHA Commissioner David H Stevens announced changes for FHA Mortgage Loans. These changes are for any FHA loans that are assigned case numbers on or after April 18, 2011.

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!

Don’t Just Sit on the Fence and Watch!

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About the Author:

David Fialk The above article was written by David Fialk, REALTOR, Broker Owner, Choice Realty Co., Iselin, New Jersey and regularly posts real estate articles of interest for home buyers, home sellers and home owners. David can be reached via email or by phone at 732-283-3400 or at www.DavidFialk.com. Licensed since 1971, David has helped over 1800 families move across town, across the state and across the country and specializes in the towns of Iselin, Colonia, Edison, Woodbridge, Avenel, Fords, Sewaren, Port Reading, Keasbey, Carteret and Metuchen in Middlesex County, New Jersey. Planning on purchasing real estate? Thinking of selling your home? For real estate information ”You Can Rely On, Contact the REALTOR You Can Rely On”.