FHA loans are one of the most popular loans home buyers obtain. Buyers can expect to see changes in FHA mortgage insurance and up front fee going into effect in 2013.
The current FHA up-front fee will increase from 1.75% to 1.85% of loan amount beginning January 1st, 2013.
Next year sometime, the monthly (mortgage insurance) MI will be for the life of the loan— not five years or 78% LTV. This is a major shift and cost.
For example, it would be like having mortgage insurance (MI) of $185 per month for 5 years and then it changes to $185 for 30 years.
A date has not been set for this change yet, but it is coming in 2013.
This post is for informational purposes only as a courtesy of real estate professional Marilyn Boudreaux, Century 21 Mike D Bono & Co.’s For more details regarding changes in FHA loans, please consult a mortgage professional for further explanation of future FHA changes.