FHA is raising it's monthly mortgage insurance, effective April 18, 2011. The current mortgage insurance premium is 0.90%. For any loan applications that are assigned an FHA case number on or after April 18th, will be charge and annual premium of 1.15%. What does that mean to you as a buyer?
On a $100,000 loan, this equates to approximately $20.83 more in your monthly payment or about $250 per year. This may or may not seem significant to you, but it will reduce your potential buying power and approval amount. It is also being projected that interest rates may reach 5.5% for a 30 year mortgage by years end.
Fortunately, there is still some time to get you FHA mortgage application before the change takes place. In addition, average mortgage rates dropped significantly from 4.88% to 4.78% on a 30 year mortgage and the average 15 year mortgage dropped from 4.15% to 3.97%. These rates change every day, so locking in your rate when rates drop like this will help you get more home for your money.
So, talk to your mortgage lender soon or feel free to contact me. I can give you a list of lenders that I refer to my real estate clients. I am always available to advise you and help you find and buy the right home.
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