FHA Loans Getting More Expensive This Spring

Feb 11, 2013

newhomecosts

FHA loans are going to be more expensive.  Starting in April a lot of first time home buyers will be hit with changes to FHA loans that will cost tens of thousands of dollars.  A recent HUD Motgagee letter (2013-04) outlines changes to both an increase in monthly payments amount and the elimination of the ability to cancel monthly mortgage insurance premium (MIP) payments.  The results translate into over $20,000 of additional payment amounts over the course of one $300,000 FHA loan or over $10,000 over the life of a $150,000 FHA loan.

Tables of the FHA MIP changes:

 Effective for case numbers assigned on or after April 1, 2013. MIPchart2012a

 Effective annual MIP rates for loans  or after June 3, 2013

MIPchart2012b

 

Sometime in the near future HUD is also expected to increase the required minimum investment to 5% from 5.5% on some larger FHA loans and cap debt to income ratios to 43%.

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by | Categories: Credit Scoring, main, Purchase |

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