Federal Housing Administration (FHA) loans will soon become more expensive and more restrictive.
If you are thinking of buying a home soon, or refinancing your FHA loan, you should be aware of the following changes:
1. FHA will be increasing the annual mortgage insurance premium by 10% for new mortgages under $625K. This takes effect April 1, 2013.
2. FHA will also require new FHA borrowers with a loan to value ratio greater than 90% to continue paying annual for the LIFE of their mortgage ( until they sell or refinance out of FHA ). For those with a loan to value under 90%, MIP (mortgage insurance premiums) must be paid for 11 years instead of 5. This change goes into effect June 3, 2013.
*Not only can you save on the interest rate and monthly payment, but dependent upon your current rate and balance, you could end up crediting an additional $50 to $400 per month from interest to paying down your principle balance! (We can calculate this for you if you give us a call.)
If you are currently an FHA customer, please call me so that we can make whatever changes are necessary to get you into a better situation. Paying PMI for 11 years or more results in tens of thousands of dollars that you could be using to pay down your principle! Let me tell show you how to convert your FHA to a Conventional with a lender paid insurance program.