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Get Your FHA Mortgage Application Started -- Fees Increase 1/2 Percent Starting Monday, April 5, 2010

By
Mortgage and Lending with Company 12345

FHA closing costs increase by 1/2 percent April 5 2010Starting Monday, April 5, 2010, getting an FHA mortgage in Texas and nationwide will be more expensive for borrowers, so time to get on the ball folks!

In new guidelines set forth earlier this year, the FHA announced plans to raise additional revenue and reduce the overall risk of its mortgage portfolio because of its shaky financial position.

The changes include the following:

  1. Increase Upfront Mortgage Insurance Premiums from 1.75% to 2.25% for everyone
  2. A plan to reduce seller concessions from 6 percent to 3 percent
  3. An increase in minimum downpayment for FICOs 580 or lower

For your own loan (or your clients'), to avoid paying these higher loan costs, make sure to have your FHA Case Number assigned prior to Monday, April 5, 2010. That means you’ll want to give a full mortgage application before the weekend so your lender can register your loan in time for the deadline.

But don’t leave your application to the last minute. It WILL cost you!

Friday is Good Friday so most banks will be closed. Your true FHA deadline, therefore, is Thursday April 1.

Also worth noting is that the FHA isn’t done with its changes.

In its policy statement, the group also announced its plans to petition Congress to raise monthly mortgage insurance premiums. The FHA’s formal request, in summary:

  1. Raise monthly premiums by roughly 0.30%, or $25 per $100,000 borrowed per month
  2. Lower upfront mortgage insurance premiums by 1.25%, or $1,250 per $100,000 borrowed at closing

For now, the request is neither approved nor acknowledged by Congress. It’s merely a request. And in the event that Congress does approves it, the FHA reserves the right to change its projections. Either way, it means higher costs for consumers.

The best plan is to get your FHA mortgage into underwriting ahead of the switches because borrowing money will be harder, and more costly.

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Tommy (NMLS #220122) is an active loan officer with AmCap Mortgage specializing in FHA loans. You can also find him on Google+ and Twitter. Over the past 10 years, he's provided home buying strategies and advice to thousands of homeowners. He's kinda like the Chuck Norris of FHA loans.

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