MiamiRealEstateKing

Looking for an FHA loan? You best hurry…FHA-insured loans to cost more

In real estate on February 15, 2011 at 3:43 pm

WASHINGTON – Feb. 15, 2011 – Effective April 18, the monthly mortgage insurance premium paid on FHA mortgages will go up about $30 per month for an average borrower, federal officials said yesterday. The upfront mortgage insurance premium paid at closing, however, will remain at 1 percent of the mortgage amount.

The U.S. Department of Housing and Urban Development (HUD) that oversees FHA says it has two reasons for the increase. First, FHA’s capital reserves are currently below a mandated minimum set by the legislature, and the fee increase will help the agency comply with the law. Second, HUD hopes to steer more buyers away from FHA loans and into the private sector by making an FHA loan less desirable.

To create the increase, HUD will boost the monthly mortgage insurance premium by 25 basis points – to 115 basis points – on FHA-backed single-family loans with loan-to-value ratios above 95 percent.

While the change is part of President Obama’s proposed budget, HUD does not need legislative approval to make the change, according to HUD Secretary Shaun Donovan.

Reprinted by Permission © 2011 Florida Realtors®

 

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  1. […] Looking for an FHA loan? You best hurry…FHA-insured loans to cost more (miamirealestateking.wordpress.com) « Previous Post […]

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