FHA Mortgage Insurance Rates are Going Up!!
HUD has really done it to us again. We have used FHA financing to give a lot of people access to the low-priced housing market in the past few years. HUD charges borrowers an upfront MI (mortgage insurance) fee as well as an annual MI fee. Currently, those rates stand at 1% upfront and 1.15% annual. That means on a $200k purchase at today’s 3.75% 30-year fixed interest rate, the upfront MI charge would be $2000 and the EFFECTIVE interest rate would be 4.9%.
In April, those rates are going up. The upfront MI will be 1.75% and the annual MI will be raised to 1.25%. And there is talk that those rates may increase AGAIN in June! This is not typical loan marketing fluff you hear on the radio…this IS GOING TO HAPPEN. So if you are thinking about purchasing a home using an FHA loan, or have the potential to do an FHA steamline refi., March is the month to make it happen. Please do NOT wait until the end of the month to make your move…HUD’s case number system will be overloaded and you may miss out. Remember, an FHA case number is good for 6 months, so even if you are thinking about obtaining an FHA loan, get that case number now so that you can be grandfathered into the current MI rates.
Securing an FHA loan is the most important piece of the home buying puzzle, but still there are a ton of variables that come into play that can affect the FHA. The best advice I can give to any homeowner is to do your research and take the time to find a well educated agent or broker like Inland Financial, securing a knowledgeable agent will help a lot, simply due to the fact that they’re time consuming and they’re able to assist more homeowners this way.