FHA mortgage insurance changes. 

“FHA has announced increases to monthly mortgage insurance premiums. Currently, the monthly mortgage insurance charge on 200k mortgage is 208/mo. Under the new rates, the premium will increase to 225/mo on the same mortgage. The biggest change, however, is FHA will require that the premium remain for the life of the loan rather than fall off at a later point in the loan’s life.

My take: an increase in costs is never good news, especially when you consider that the MI will remain with the loan for life. However, FHA still offers better interest rates and easier qualifying parameters. Also, most buyers that use an FHA mortgage end up selling the property prior to when their MI expiring anyway. A harder issue to deal with, in my opinion, would be if FHA changed their rules to make it harder to qualify, which they are not. Further, there are many great deals with conventional mortgage insurance now, so exploring a conventional loan for buyers is always an option. I’ll touch on those options in the future.” (Darin Rhodes)

Important:
If you currently have an FHA mortgage, your rates will stay the same. These changes will only apply to new FHA mortgages going forward. The changes are slated to occur some time around June 1, 2013.

Read more in depth info here.

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