Just a quick reminder:
The FHA is planning an increase to up front mortgage insurance premiums and annual insurance premiums, which will cause the cost of FHA loans to increase. The agency is raising fees in an effort to bolster capital reserves, which have fallen below Congressionally mandated levels.
The annual insurance premium will increase by 0.1% on loans under $625,000 and by 0.35% on loans over $625,000. Upfront insurance premiums (UFMIP) will increase by .75% to a total of 1.75%. The changes to UFMIP will take effect on April 1, while the changes to annual insurance premiums will take place in steps: the first increase of 0.1% will take place on April 1, the second increase of 0.25% will take place on June 1.
FHA loan volume has exploded in recent years. While the original intention of the FHA was to help lower-income buyers become home owners, it has now become a much more generalized lender, handling nearly 20% of all residential mortgages in 2010, and over 30% of all purchase loans. In 2005, the FHA handled 4% of residential mortgages, and a little over 5% of all home purchases.
Loading ...
RSS feed for comments on this post.
Leave a comment