Effective on any FHA loans that have a case number assigned after September 7th, 2010 the monthly mortgage insurance will be increasing to .90% from .45%. additionally the government has given the HUD secretary the ability to raise the FHA mortgage insurance rate to a whooping 1.55%.
For those of you that aren't real estate professionals it means that the mortgage insurance portion of your monthly payment will double if you have a case number assigned after the above date. This will result in diminished buying power and higher monthly payments. Mortgage insurance is required on all loans with a loan to value ratio less than 80% (most loans).
FHA case numbers are assigned right after contracts are ratified and mortgage applications are completed. If you're in the market and looking at an FHA loan product, pick up the pace on your search and take advantage of the current mortgage insurance rates before they double.
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