www.lasvegasmtg.com Report: FHA Loans will be costing more starting April 18, 2011
by John Le Francois
www.lasvegasmtg.com Report: FHA Loans will be costing more starting April 18, 2011 in Las Vegas, Nevada. FHA Mortgagee Letter 2011-10 dated February 14, 2011 details the new Annual Premium for Mortgage Insurance. Effective with all new FHA case numbers issued after April 18, 2011 the Annual Premium will go up based on the following criteria.
The purpose of the new changes is based on the legislative mandate 202 of the National Housing Act to make FHA financially sound and to insure the FHA loan program is available to to future borrowers.
The chart below shows the before costs and the new cost based on terms and LTV.
Example of a FHA Loan with the before and after Annual Premium Insurance costs on a typical FHA home Loan in Las Vegas.
To put this in to perspective a FHA and DU 8.2 guidelines state the total housing expenses can not exceed 47% of income. If the Borrower was approved at the maximum 47% Housing Ratio prior to April 18, 2011 the borrowers purchasing power would now decrease by $4,500.00. Coupled with higher interest rates that are certain to be coming in the near future borrowers can not afford to be sitting on the fence anymore. The choice is yours but the clock is ticking down on what you can qualify for on purchasing a house with the increase of FHA Annual Mortgage Insurance Increase!