The FHA's monthly mortgage insurance premium is due to increase in April by .25 basis points across the board for all loan to values. This means the mortgage insurance premium currently charged on a 30 year mortgage with a loan to value of 95% or above will increase from 90 basis points to 115 basis points. On the example below it shows the difference in monthly payment on a sales price of $163,000 to be $33 a month. This means the borrower needs to have an additional $33 in income after the new premium goes into effect for the debt to income ratio to remain the same.
October 2010 April 2011
90 bps 115 bps
Sales Price 163,000 163,000
3.5% Down 5,705 5,705
Loan Amount w/o UFMIP 157,295 157,295
Monthly MIP 118 151
If you have been pre-qualifed by a lender for an FHA loan, please contact the lender to be sure this rate increase isn't going to impact your approval.
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