05/19/2012 2:36 pm
More FHA/HUD Program Changes Effective 4/18/2011
Posted by on Tue, 04/12/2011 - 10:28am
Effective Monday April 18, 2011 FHA/HUD will be increasing there monthly mortgage insurance premiums. The monthly mortgage insurance will be increasing by approximately 25 basis points from the previous program guidelines. In essence this means that borrowers monthly cost to hold an FHA mortgage will be going up.
If you are a borrower on the fence about purchasing a new home or refinancing your existing home through FHA, it will be more cost effective to move on this quickly. Keep in mind there are alot of great alternatives to FHA loans. With the cost of FHA loans going up, mortgage insurance companies are recognizing the opportunity to compete for your business.
One great alternative when purchasing a home is a conventional loan used in combination with "Single Premium Mortgage Insurance." How this works is the mortgage insurance company charges a one time lump sump fee at the start of the loan instead of charging a monthly fee rolled into your payment. The lump sum fee can be costly but you can offset this cost by getting a credit from the seller. It will keep your monthly payments low, and possibly allow you to afford a larger home. In many cases this will be a great alternative so please discuss this with your lender. If structured properly this can also be used in refinance scenarios!
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