Julie Johnson

Better Homes & Gardens Real Estate | David Winans & Associates

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FHA Raising Monthly Mortgage Insurance

February 16th, 2011 · No Comments · Finance

HUD recently announced that they will be increasing monthly M.I. M.I. is the fee HUD charges monthly with your payment. Currently the M.I. fee is .90% of the loan amount, but this monthly fee will increase to 1.15%. That is a .25% increase. Don’t get (M.I.P) Mortgage Insurance Premium. and M.I.(Mortgage Insurance) confused, they are different fees for FHA loans. MIP is a one time upfront fee that is charged and rolled into the note. The current M.I.P. fee is 1% of the loan amount.This is a effort by HUD to strengthen their role in providing financing for consumers. HUD claims the average home buyer will see a $35 dollar a month increase in their monthly payment.

Example:
Sales Price: $150,000
Loan Amount: $144,750
3.5% Down Payment: $5250
M.I.P.: $1,447.50
Current M.I. @ .90% = $108.56
New M.I. @ 1.15% = $138.72

There would be a difference of $30.16 a month in the payment with the change. To some this is not big deal and to others it may be.

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