Beginning April 1st, 2012 FHA will be raising their upfront Mortgage Insurance. You may be asking yourself 'how does this effect me'?
Here is a scenario:
Your current loan approval amount $150,000 FHA
Old Monthly MI = 1.15% = $143.75 Monthly MI
New Monthly MI = $1.25% = $156.25 Monthly MI
Old Upfront MI = 1% or $1500 based on above loan amount (added to loan amount)
New Upfront MI = 1.75% or $2625 based on above loan amount (added to loan amount)
This means that you would qualify for about $5,000 less on your mortgage with the new increase beginning April. Your loan amount would decrease to $145,000.
This reduction may be signficant to a buyer trying to max out their purchase, which happens all the time, by the way. If you feel you this…