FHA has announced that it will increase the annual Mortgage Insurance Premium (MIP) for the second time in six months. The last increase was in Oct of 2010 and resulted in a $58 monthly increase in the payment amount on a $200,000 loan amount.
The recently announced increase in MIP on FHA loans will be 25 basis points, or 0.25%. This latest MIP increase is scheduled to take effect on all loan case numbers assigned after April 18, 2011.
Keeping with our $200,000 loan example, this represents a $42 per month increase in the payment amount.
The bottom line here is, if you are considering buying a house in the next few months, get ahead of this increase. Get busy looking for a home while interest rates are low and before the FHA implements the new MIP rates. All you have to do is be under contract by April 18. That’s about eight weeks from now.
Contact me and I’ll be glad to meet with you and get you started searching for your next home.
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