FHA Financing Changes Coming April 2011

First-Time Home Buyers, this is extremely time sensitive information that will have a direct impact on buyers seeking FHA financing after April 18, 2011.  All FHA loans are assigned a case number.  The upcoming changes with FHA deal with the rise in the monthly MIP (Mortgage Insurance Premium).  This change will effect all case numbers ordered on or after April 18, 2011.  The monthly MIP will go from .90 to 1.15, or ¼ percent.  To better understand the implications of this increase let’s look at an example.  For a loan of $150,000 the difference in payment for MIP increases from 112.50 per month to 143.75 per month, or a 31.25 increase. Doesn’t seem like much, but that small increase adds up over the life of the loan.  Hence, if you are considering purchasing a home, and now is as good a time as any considering the still low interest rates and high levels of inventory on the market, with FHA financing the cost of that loan changes significantly in less than 30 days.