FHA Mortgage Insurance Premiums Set To Rise Again In April

FHA Mortgage Rates Increase April 2012 Denver ColoradoIf you’re on the fence about purchasing a property in the near future and plan on using an FHA mortgage to buy a home, you may want to do it before April 18, 2012.  

Here are the two types of Mortgage Insurance or PMI that is associated with every FHA loan:

 

1.)    Up Front Mortgage Insurance Premium: The current rate on this premium is 1% of the loan amount and is set to rise to 1.75% on April 18, 2012.  There is no refund on the upfront mortgage insurance when you sell the home or refinance. It is strictly a cost of doing a FHA mortgage.  

2.)    Annual or MONTHLY Mortgage Insurance (Which is referred to both ways because the borrower will pay for it monthly – but it’s calculated on an annual basis): The current rate for monthly Mortgage Insurance is 1.15% and is set to rise to 1.25%  depending on the loan amount.

FHA loans are still great loans and offer low interest rates that are not credit driven and only require 3.5% down payment. With all the MIP hikes that we have seen in the last 3 years this should open the arena for other conventional loan programs from local banks to help compete with FHA.

If you have any questions regarding financing your next home purchase please call Ian Armstrong at 720-771-7376 in order to help answer your questions and get you in touch with a local lending institute.    

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