Special offer

FHA Increases Their Up Front and Monthly Mortgage Insurance Premiums April 1 2012 - How Does it Effect You? Reblog

Real Estate Agent with Top Agents Atlanta Metro

Rates are increasing on April 1, so if you are doing FHA, both the Up Front Fees and the MIP is increasing.  The change will result in about a $20 to $30 change per month, the changes are outlined in the below blog.

Original content by Donna Harris 0480809

In today's real estate market, many buyers are opting for the FHA route for obtaining their mortgage. FHA loans are different from Conventional loans in many ways, mainly an FHA loan is a Government loan that only requires a 3.5% down payment and a Conventional loan isn't, and it requires a minimum of 5% down payment.  Last year, the fees and Mortgage Insurance Premiums (MIP) had a change in their calculations. This caused many home buyers to be priced out of the market with their payments going up considerably.

As of April 1, 2012, FHA has yet again, changed their fees and MIP calculations. This change shouldn't price people out of the market, but there is a difference in payments that will make people say, "I'm paying how much more for the same house because of fees?"

After April 1, 2012, the Up Front MIP will go up to 1.75% of the loan and the Monthly MIP will be calculated on 1.25% of the loan.  What does this mean?

At $150,000 - Today's 3.875%, the mortgage payment will increase approximately $18.

At $200,000 - Today's 3.875%, the mortgage payment will increase approximately $24. 

At $250,000 - Today's 3.875%, the mortgage payment will increase approximately $31.

You might think it's not that big of a deal for an extra $20 here or $30 there, but it's a MONTH!  That's $240 here or $360 there a year!  It adds up. Now, multiply that out over 30 years.  My daughter's dance class is $700 a year, and her swim lessons that she's starting in a couple of weeks are $780 a year. I'm struggling to justify those expenses as she's only 4. The increase is about half her dance class. Do you have kids doing extracurricular activities? How much do they cost, and will this increase impede into that budget?

After April 1, 2012, you don't have any choice but to accept these terms if you're obtaining an FHA loan. However, prior to that date, you have a choice. As long as you start the loan process prior to April 1, you're in the clear. You do NOT have to close on a house prior to April 1.  That means, if you're thinking of buying a house in the next couple of months, and you're going to go the FHA route, you need to get pre-approved for your loan in the next month. Today is March 1 and there are 31 days in March. Let's get going! Get off the fence and keep some extra money in your pocket instead of waiting until after this important deadline!

If you're looking to buy a house in the Austin TX area, please contact me TODAY so we can get you approved now!

**There are other changes that effect other markets with loan limits over $625k, but the Austin area has a max FHA loan limit of $277k, so those higher priced issues do not effect my market.

**Are You Packed Yet?**

donna harris Realtor Austin TX blog

Donna Harris, REALTOR®
RE/MAX Austin Skyline


Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, CedarPark, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way. 

For real time Austin TX listings,click here.

** Multi-Million Dollar Producer Year after Year **

** Platinum Top 50 Finalist 2011 out of almost 9000 agents in Austin TX**
** Five-Star Professional 2011 **
** RE/MAX 100% Club **

Copyright© 2012 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
FHA Increases Their Up Front and Monthly Mortgage Insurance Premiums April 1 2012 - How Does it Effect You? * was first published on donnahomesblog.com.

Comments (2)

Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

Thank you for the reblog, Mary. More people need to be aware of this and get off the fence!

Mar 05, 2012 06:16 AM
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

Just when you thought it couldnt get higher for FHA loans. They made it official now, so I guess its a done deal.

Mar 08, 2012 08:30 AM