On April 9th the Federal Housing Administration announced that the cost of mortgage insurance premiums are going up. This will affect home buyers in the following ways:
- An increase from 1% to 1.75% in the upfront mortgage insurance premium
- A .10% increase in the annual mortgage insurance premium.
- On June 11, 2012 loans exceeding $625,000 will see a .25% annual mortgage insurance premium increase.
An example would be if a Simi Valley home buyer was purchasing a home with 3.5% down and financing 96.5% with an FHA backed loan, that buyer would pay a 1.75% of the loan amount as upfront mortgage insurance premium. This would be part of the buyer’s closing costs. The Buyer would also be charged an annual premium at 1.25% (this fee is higher for FHA Loans over $625k after 6/11/12) for all FHA case numbers assigned after April 9th, 2012. If the buyer is borrowing 95% or less of the purchase price that annual premium is 1.2%.
Leave a Reply