Come September 7th, the FHA will be increasing the annual mortgage insurance premiums for FHA loans to 0.85% or 0.9%, depending on the loan-to-value ratio of the loan. In addition, the upfront mortgage insurance premium will be reduced to 1.0%. In most cases this will result in an increase of $38/month for the average homebuyer using an FHA loan. Why the increase? According to the FHA, the fees are necessary to help replenish the FHA capital reserves fund and to ensure the continued availability of the FHA loan program.
With all the news regarding the FHA and interest rates and loans to save homes from foreclosure, it will be interesting to see how this all plays out by the end of the year.
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