Thanks to Scott Tripp with BB&T in Conway, SC for providing this great information about upcoming changes to FHA loans. If you have any questions about the changes, give me a call.
FHA is making some significant changes to upfront fee and month mortgage insurance premiums effective 9 April. I’ve summarized below and provided an example of how the change will affect the loan.
Currently FHA charges a 1% upfront premium that may be financed and month mortgage insurance of 1.15% of the loan balance.
Effective 9 April and after, the upfront premium will be 1.75% & monthly mortgage insurance will be 1.25% of the loan balance.
Example below on a loan of $100,000 at 3.75%
Loan amount with upfront fee financed. Now $101,000. Will be $101,750.
Monthly mortgage insurance. Now $96.79/mo Will be $105.99/mo.
Principle and interest payment. Now $467.75/mo Will be $471.22/mo.