Getting an FHA Loan? Hurry Before the Insurance Rises

With the flexible credit requirements and low down payment, an FHA loan is quickly becoming one of the most popular loans for new buyers.  The loan comes in a 30 or 15 year fixed, just like conventional loans, but the Federal Housing Administration insures the loan amount to make buyers more attractive to lenders.

But if you’re shopping for a house right now, and plan on getting an FHA loan – don’t wait too long or your upfront Mortgage Insurance Premium will go up.

FHA loans come with Mortgage Insurance Premiums that are built in over the course of the loan.  When you close, there’s also a one-time upfront Mortgage Insurance Premium due at closing.  FHA is now increasing this upfront cost by 0.50% from 1.75% to 2.25%.

How much does this equate to?

Well, on a $200,000 loan, this is an increase of $1000!  So if you’re looking for a home, and planned on getting an FHA loan, don’t procrastinate, as you could end up losing money if you don’t have a case number assigned before April 4th.  FHA is making this increase effective on case numbers assigned on April 5th, 2010 and forward.

Related posts:

1. Deducting Private Mortgage Insurance from your Taxes ...
2. Paying Your Taxes and Insurance Through Escrow ...
3. Buying a House in a Hurry: the First-Time Home Buyer Tax Extension ...

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