FHA Mortgage Premiums Set to Increase
1st Change - On April 1st, 2013, the Federal Housing Administration is increasing its required monthly mortgage insurance premium from 1.25% to 1.35%*. While that might not sound like much, it can add up to a substantial amount of money over time.
2nd Change - What’s more, starting June 3rd 2013 FHA will no longer allow you to cancel your mortgage insurance premium payments when your loan balance drops to 78% of your property’s value. That means you could be paying a mortgage insurance premium for decades! Or, if you have the equity you will have to refinance into a conforming loan at the current market rate of the time.
Take Action - If you currently have clients with little money to put down, on the higher side of the debt to income ratio or some minor credit issues, let them know their window of opportunity may be closing to avoid the upcoming changes.
*Premiums are higher on loan amounts exceeding $625,500
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