FHA Mortgages, Lending Guidelines, Mortgage Guidelines

FHA Increases Annual Mortgage Insurance Premiums Again

April 20, 2011 by · 1 Comment 

US Department of Housing and Urban DevelopmentIn case you missed the big event on April 18th, FHA administered an increase to the Annual Mortgage Insurance Premiums for all forward mortgage terms as instructed in Mortgagee Letter 11-10. You may be wondering why FHA would increase their fees again considering they raised fees last fall.

Per a legislative mandate in section 202 of the National Housing Act to ensure that FHA’s Mutual Mortgage Insurance Fund remains financially stable, an increase in the Annual Mortgage Insurance Premiums was required due to growing utilization of the FHA home loan in real estate transactions especially in Northwest Indiana and the surrounding Chicago suburbs. 

The increase by FHA to the Annual Mortgage Insurance Premiums is only 25 basis points (bps) and it should be noted that the Upfront Mortgage Insurance Premium remains unchanged at one percent of the loan amount. In the chart below you can see the actual increase that transpired on April 18th.

FHA Increases Monthly Mortgage Insurance Premiums Again

Although FHA calculates mortgage insurance premiums on an annual basis, a borrower actually pays mortgage insurance premiums back on a monthly basis. What kind of impact could this have on your monthly FHA home loan payment in Northwest Indiana and the surrounding Chicago suburbs?

Monthly Impact of FHA Increase to Monthly Mortgage Insurance Premiums

Even though FHA has slightly increased their fees yet again, the FHA home loan is still a great value for home buyers and homeowners looking to refinance. If you are ready to begin your discussion on how an FHA home loan could still benefit you, complete your secured online FHA home loan application today!

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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Comments

One Response to “FHA Increases Annual Mortgage Insurance Premiums Again”
  1. John says:

    This does not make it harder to afford a home, but it does decrease the amount of home a buyer can afford (due to higher DTI ratios).

    Good post about the details of these changes, James.

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