FHA is A-Changin'

Oh well, I guess it had to happen. FHA is turning up the heat on us in several different ways! It's raising its down payment amount from 3% to 3.5%, effective January 1, 2009...at least that's the plan. If you're purchasing a $300,000 home, instead of putting down $9,000 you'd have to put down $10,500. It ain't a big difference, but it's something to keep in mind.

Also, the up front mortgage insurance premium (MIP) you have to pay to get an FHA mortgage was raised from 1.5% to 1.75%. The good news is the up front fee can be added onto your loan amount. For instance, if your mortgage is $200,000, the 1.75% fee (or $3,500) is added onto your mortgage, making it $203,500.

To top it off, the monthly insurance premium has also been increased for mortgages above 95% LTV. What does that mean? Simply, if you put down less than 5% on your mortgage, your monthly mortgage insurance percentage is slightly increased. I won't bore you with the calculation, but it's only a small amount per month.

For a further explanation of the skinny on FHA shoot me an email. For the official FHA word go to the Official FHA Website.

What does it all mean? Of course, more money outta your pocket. If you wanna play you gotta pay!

See ya,

Kirk Charles
Author & Sr. Loan Officer
973-200-3253 (o)
973-919-8065 (c)