Is FHA mortgage insurance going up again? Yes, FHA mortgage insurance will increase again this coming April. It will be the FIFTH INCREASE for home buyers within the past 3 years!
Why does it keep increasing? The Federal Housing Administration has decided that they must increase the premium to help cover any future losses that may arise from home buyers defaulting on their mortgages. After the boom and bust in the housing market over the last several years FHA realized they may not have adequately accounted for the potential risk exposure.
Will FHA mortgage insurance rates continue to rise? Let’s take a look at the last 3 years:
- April 5, 2010 increase to FHA mortgage insurance
- October 4, 2010 increase to FHA mortgage insurance
- April 18, 2011 increase to FHA mortgage insurance
- April 9, 2012 increase to FHA mortgage insurance
- April 1, 2013…yet another increase to FHA mortgage insurance rates, making the new premium approximately 2 1/2 times more expensive than in early 2010. Do you see a trend?
How much affect will this have on first time home buyers? That depends on purchse price, buyer scenario, etc. The main thing to remember is that there are alot of other variables besides purchase price and interest rate that first time home buyers need to consider.
Don’t make the biggest decision of your life without getting educated! If you would to find out more about FHA loans or the first time home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.
