FHA Mortgage Insurance increasing 63 percentPosted by on Saturday, September 4th, 2010 at 7:54am.
Recently HUD announced there will be changes in the upfront mortgage insurance and monthly mortgages insurance on Atlanta FHA loans that will take effect October 4, 2010. The upfront mortgage insurance is going down from 2.25% to 1.00%, but the monthly mortgage insurance is going up. Right now HUD is saying the monthly mortgage insurance will increase from .55% to .85-.90% depending on loan-to-value for loans with an amortization greater than 15 years (aka 30 year fixed).
If you are contemplating buying a home and using an FHA loan for financing, you want to know how this is going to affect me. Here is the breakdown:
$200,000 loan 4.5% rate 5.29% apr 30 year fixed
Currently, before the upcoming change, your payment would be $1,088. After the change you payment goes up to$1,133. This is nearly a $10,000 decrease in purchasing power. Also, this change affects your loan as if you had a .375% increase in rate and $540 more per year out of your pocket.
There is a way to protect yourself from the increase and get grandfathered in under the old mortgage insurance. Contact Toby Lane at Academy Mortgage for more information.
Toby Lane, Mortgage Consultant
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