So is the cost of buying a home going up? The answer to a lot of home buyers is YES.
FHA has announced that they will increasing the Up Front Mortgage Insurance Premium (UFMIP) by.75% and the annual by .10%. As of April 1st 2012, the new UFMIP will 1.75% and the annual will go up to .65%
What is a FHA mortgage? A FHA home loan is a loan that is backed by the Federal Housing Administration. It provides for low donw payment home loans. Through FHA you can buy a home with 3.5% down payment and a FICO score down to 640 and in some cases 620 in California. FHA also allows for higher DTI's, non-occupying co-borrowers, gifts for down payments.
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So what do this increase mean to you. #1 It will not mean more money directly out of your pocket. Why? Your UFMIP can be financed into your loan. But it will mean that you will have a higher loan amount and subsequently payment. Also it will increase your payment with the increase in annual MI or monthly MI with the .10 increase.
But will it decrease your buying power or how much you can buy??
Click here to see if will effect your buying power
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