Just like everything else, the price of an FHA loan is going up. I'm sure a good percentage of you are aware, but for those who are not, as of Monday, April 18th, FHA will be increasing their mortgage insurance premiums by 25%. For those of you considering a home refinance or new purchase loan, you need to have received your FHA case number by Friday to keep from paying the higher cost.
Lending guidelines have gotten tighter over the last few years and debt to income ratios are a sticky point with many banks and lenders. The increased cost to consumers for mortgage insurance can literally be the difference between a loan approval and denial.
Not to cast a dark cloud(or stand on my soapbox for that matter)but this is the second increase that mortgage seekers will have seen in the last couple of weeks. With the April 1st passing of new Federal regulations, banks responded with increased loan rates. Now with this hike in premium cost, a loan payment you thought you were getting two weeks ago could easily be $100 higher by next week depending on the loan size.
All that said, FHA continues to be one of the least restrictive, least expensive ways to qualify for a home. But unfortunately, like everything else the price is going up. The housing recovery will be dependent on having home buyers. The more we restrict and limit the buying pool the longer the recovery will take.
Have a great week!