Changes to Federal Housing Authority (FHA) Mortgage Insurance Premiums are about to go in effect.
As a licensed Real Estate Agent here in Northern Nevada, I try not to give out to much mortgage information as it is not my area of expertise, but I do try to stay informed to be able update my clients when changes in the lending industry are about to happen.
With that being said, the following information briefly highlights a change in the FHA mortgage insurance premiums that are about to go in effect. For additional information and questions about this new policy, please contact your preferred lender or contact me for a list of lenders here in the Reno and Sparks areas, I will be happy to assist you with finding a lender to help answer your questions.
~Changes to FHA Mortgage Insurance Premiums~
It is officially fall and we are about to see more than just the color of leaves on trees change this season. Announced earlier this year, the change in mortgage insurance premiums is about to go into effect.
Scheduled to take effect October 4th, 2010, the Housing and Urban Development (HUD) will allow an increase in the amount of insurance premiums the FHA charges for insuring new home mortgages.
HUD made an announcement earlier in the year saying they were going to make these changes to strengthen FHA's finances. They believe this change will not have a huge impact on new home buyers yet will help the FHA to increase their reserves and help bring back private lending.
From what I can figure out , starting October 4th, FHA's initial charge for insuring your loan will fall from 2.25% of the loan amount to 1% of the loan amount, but the monthly premiums over the life of the loan will rise from 0.55% of the initial loan amount to 0.90% of the initial loan amount.
This increase will obviously impact your monthly payment. Even though you may be paying less at closing, you will be making up the difference in your monthly payments. Please consult a lending expert to obtain additional information on how this will affect the purchase of you new home.
If you have already been pre-approved for a FHA home loan and are still looking to buy a home, contact your lender and find out how much more your mortgage insurance is going to cost each month should you buy after October 4, 2010.
As I mentioned at the beginning of this post, lending is not my area of expertise but I do like to keep you informed on changes in the mortgage industry just so there are no surprises when it comes time to buy your next home.
For additional information, Jeff Bolenger, FHA expert from Cherry Hill, NJ, wrote a post that will help explain this new change to FHA Mortgage Insurance Premiums. Please take the time to read his explanation, FHA Monthly Mortgage Insurance To Increase - Ouch, it should help understand what to expect when applying for a FHA loan after October 4Th.
If you are looking for a lender in Northern Nevada, call me for a list of names and numbers of professionals who can help you obtain financing on your new home. For a list of homes available for sale in Northern Nevada, call me! I will be able to help you with all of your Reno, Nevada and Sparks, Nevada real estate needs!
With the change of season comes a change in FHA Mortgage Insurance Premiums!
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