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Health & Fitness

Changes in FHA Mortgage Insurance on the Horizon

An increase to the mortgage interest premium percentage is coming, along with how long you'll pay that premium on your FHA loan!

The FHA announced sometime ago they were going to make changes to their mortgage insurance program and the dates those changes take effect are rapidly approaching...

Effective April 1, 2013 the mortgage interest premium will rise from 1.25% to 1.35%. This is the 3rd increase in 3 years. Just a little over 2 years ago the premium was at .55%! Be aware that you must have obtained an FHA case number prior to this date. Typically, this means you must be under contract no less than 2 weeks prior to April 1st.

In addtion, effective June 3, 2013, any buyer who puts less than a 10% downpayment on a home will pay mortgage insurance for the ENTIRE DURATION of the loan.  Currently, you must pay mortgage insurance for no less than 5 years and must reach a 78% loan-to-value; then the FHA will automatically drop the monthly premium. After June 3rd that will not be the case.

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