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New FHA Loan Requirements

The Federal Housing Administration is going to be making some changes to FHA loan requirements.  These changes will go into effect on April 18, 2011.  The Federal Housing Administration will be increasing the Mortgage Insurance Premium (MIP) that is charged to borrowers on a monthly basis.

This FHA loan requirements change will increase the annual MIP by .25% on every FHA loan option available. On a $165,000 mortgage, this will increase the monthly payment by $34 per month. While this may not seem like a lot to some, over the course of a year it means you could be paying an extra $408. Depending on your budget, that could be a car payment, a month’s worth of groceries or some extra spending cash.

There are many factors that go into how long you have to pay your mortgage insurance premium, but since 2001 most FHA mortgages are required to pay a monthly MIP for the first five years. If you close your loan before these new FHA loan requirements go into effect, you’re looking at a savings of approximately $2,040 over 5-years!

So what does this mean for you?  Well, everyone has their own unique financial situation so it’s important to speak with a Home Loan Expert in order to make sure you’re getting the most accurate information.  Your down payment and loan-to-value ratio will determine what your MIP will be and your initial down payment will have a factor in how long you will be required to pay it.

With mortgage rates trending upward, and additional changes and fees on the horizon the time to refinance or make your home purchase is now.  Don’t pay an extra penny more than you have to in today’s market.  Contact your Home Loan Expert today.

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