Back in October I posted a positive blog about FHA's increasing charges and the hope that they would lead the mortgage industry back towards a more balanced market. Well apparently the increases were not enough.
Effective with FHA case numbers issued on and after April 4th, 2011, FHA is increasing the rate of monthly mortgage insurance.
For a typical 30 year borrower that is putting the minimum allowable down payment, the current factor used to calculate the fee is going from 0.9% per year to 1.15% per year.
Let's look at the monthly payments that would have resulted during 3 time periods: before 10/4/10, present time, and on or after 4/4/11 (assuming equal interest rates of 4.75% and 5.547% APR, 30yr fixed mortgage, 3.5% down payment, $150k purchase price, excluding property taxes and home owner's insurance).
Before 10/4/2010: Principal & Interest = $772.07
Pmi = $ 66.34
Total = $838.41
Present: Principal & Interest = $762.63
Pmi = $108.56
Total = $871.19
April 4, 2011 & After:
Principal & Interest = $762.63
Pmi = $138.72
Total = $901.35
Stay tuned, I'm sure more changes are coming.
