FHA MI on the Rise Again

Dated: 11/26/2012

Views: 2051

This blog is not intended to create panic to homebuyers it is merely to educate the potential homebuyer as to what is going on with the most used loan we have to utilize in our country.

The Federal Housing Administration (FHA) Fiscal Solvency act of 2012 sailed through the House with 98% approval, next stop will be Senate approval.

What does this mean for the FHA financing Buyer?  It means that at some point in 2013 MI (Mortgage Insurance) will increase from 1.50 to approximately 2.05 and will be in place for the life of the loan.  Whereas today if you purchase a house once you pay the loan down to 80% of the homes value, you contact your mortgage company to stop paying the MI for your loan, should this pass in the Senate you will have to pay the MI for the life of your loan unless you refinance to prove that you owe 80% or less of your homes value; at today's rates not a big deal but if you look at where rates will be in 6-8 years it will be a big increase to your loan.

Just something to think about if you are choosing to wait to purchase a home in 2013 vs purchasing now!

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Carolann Newton

I was a domestic paralegal for 8 years prior to Real Estate. Since I have been in Real Estate I have grown to love this business, even though it does have it's challenges; it is very exciting. There i....

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