FHA changes include cost increase on April 1, 2012

By Roy Kelley

Industry Observer with Retired

March 26, 2012 08:07 AM

FHA changes include cost increase on April 1, 2012

We received an email from Senior Mortgage Consultant Chris Lunn at Capital One Bank Home Loans, chris.lunn@capitalone.com, alerting us to changes in the FHA mortgage program. The cost of mortgage insurance will be increasing.

FHA case numbers assigned after April 1, 2012 will see an increase in upfront and monthly mortgage insurance rates, according to Chris. Buyers that have been uncertain can beat the deadline by submitting contracts to their mortgage lender this week.

Effective April 1, 2012, the FHA upfront mortgage insurance premium will go from 1% to 1.75% for all mortgage amounts. The annual mortgage insurance premium will increase from 1.10% to 1.20% for loan to values that are 95% or less and from 1.15% to 1.25% for loan to values greater than 95%.

Effective June 1, 2012, in counties that allow mortgages up to $729,750, the annual mortgage insurance premium, which is paid on a monthly basis, will increase for mortgage amounts from $625,500 to $729,750. The factor will increase from 1.20% to 1.45% for loan to values of 95% or less and from 1.25% to 1.50% for loan to values greater than 95%.

Many home buyers will find these changes to be confusing. All should consult with their mortgage loan officer and obtain the exact figures relating to the costs of the selected mortgage program.

Thanks to Chris for his update. By the way, Chris noted that they can help borrowers with credit scores as low as 580 to obtain FHA mortgage financing.

Chrysanthemum Festival, Longwood Gardens IMG_0669

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

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Michael Maynard

New Neighbors Realty - Milford, CT

"Welcome Home!"

I was discussing this last week as well, big difference in pricing!

Mar 26, 2012 08:10 AM

Rob Thomas

Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954 - Bristol, TN

Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro

Roy ...I went to a meeting last week about this ....Have a great night!

Mar 26, 2012 08:21 AM

Roy Kelley

Retired - Gaithersburg, MD

Thanks so much for your comments. Dolores and I just returned from a long weekend in Pennsylvania and Delaware,

Have an outstanding weekend.

Mar 26, 2012 08:28 AM

Juli Vosmik

Dominion Fine Properties - Scottsdale, AZ

Scottsdale/Cave Creek, AZ real estate 480-710-0739

Roy, great information to help FHA buyers. The rise in cost is unfortunate, but with property negotiations, the seller can pay some of those upfront MIP costs.

Mar 26, 2012 10:04 AM

Debbie Laity

Cedaredge Land Company - Cedaredge, CO

Your Real Estate Resource for Delta County, CO

Thanks for the update, Roy. You spelled it out really well. Have a great night.

Mar 26, 2012 12:16 PM

Kay Van Kampen

RE/MAX Broker, RE/MAX - Springfield, MO

Realtor®, Springfield Mo Real Estate

Good information to know Roy. With your prices much higher than ours, I think the highest FHA loan we can do here is around $300,000, and to me that's too high for an FHA loan.

Mar 26, 2012 12:21 PM

Roy Kelley

Gaithersburg, MD

Cal Yoder

Keller Williams Elite - Lititz, PA

Homes For Sale in Lancaster PA - 717.413.0744

Roy, thanks for the information. I knew this was happening, but did not have the details. Have a great evening.

Cal

Mar 26, 2012 12:37 PM

William Johnson

Retired - La Jolla, CA

Retired

Hi Roy, We all need to keep up with these changes . The charges may not feel significant in the big picture but for new first time Buyers, we have to respeect that these costs are real and come due every month . Good Job putting these changes into a balanced perspective.

Mar 26, 2012 01:44 PM

Wayne Martin

Wayne M Martin - Chicago, IL

Real Estate Broker - Retired

When you take from Peter to give to Paul, pretty soon you must take from Paul to give to Peter. Save on your paycheck, pay more for a home. There is no free lunch unless you are a politician!

Mar 26, 2012 09:27 PM

Scott Godzyk

Godzyk Real Estate Services - Manchester, NH

One of the Manchester NH's area Leading Agents

Good Morning Roy, that is a sharp increase but i can see well needed to recover from all the defaults. It means buy now!!!! and save!!!! Have a great day

Mar 26, 2012 10:23 PM

Good morning to all. It is always good to receive your comments. Buyers that have delayed their home purchase will have higher costs.

Mar 26, 2012 10:55 PM

Keith Gilkey

Re/Max Chesapeake - Elkton, MD

410-920-7214, Re/Max Chesapeake

Roy, I guess we all new this was coming. I would like to see it become more friendly for home buyers to get this economy turning around. Every time a home is sold it means improvements or changes to the property which means more jobs!

Mar 27, 2012 02:17 AM

Thanks, Keith, for stopping by. The volume of foreclosures has to lead to higher mortgage insurance premiums.

Mar 28, 2012 12:27 AM

We are enjoying another beautiful day in Kentlands. Enjoy the colors of the season with your camera in hand.

Mar 29, 2016 02:49 AM

We have a beautiful morning in Kentlands and an ideal time for outdoor activities.

Have a great Saturday and a wonderful weekend.

Jun 17, 2016 09:36 PM

We have a sunny Friday morning in Kentlands but are expecting rain later today.

Have a great weekend.

Oct 21, 2016 12:52 AM

One of the March, 2017, challenges to go back an update old blogs. I am in that process.

Mar 05, 2017 09:30 AM

It is sometimes a good practice to revisit old blogs and reblogs. We might even find some good ideas for current posts

Apr 23, 2019 04:06 PM

FHA changes include cost increase on April 1, 2012

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