May 12th, 2011
Federal Housing Agency (FHA) loan premiums have increased marginally starting on April 18. The annual mortgage insurance premium raised a quarter of a point for borrowers, applying to all FHA loans taken on or after April 18. The increased premium does not apply to loans made before the increase date.
These government loans are extremely popular, and the agency does not believe this will have a large effect on the overall affordability of the loans.
According to the New York Times, “the new rate structure would raise the cost of a $157,000 mortgage, a typical F.H.A. loan amount, by about $33 a month, or $396 a year.”
FHA loans have becoming increasingly popular over the past year, with about 30 percent of home purchases made with them. Just five years before, only about 6 percent of home purchases were made with FHA loans.
Contact a loan professional to see how these changes could affect your home ownership planning.