THE BAD NEWS
The Federal Housing Administration will be increasing monthly PMI premiums on April 17, 2011.
This is the second increase in the past year. On October 4, 2010, the FHA bumped the monthly PMI to .9% from .55% on it’s maximum loan to value programs (96.5%).
The premium will go to 1.15% on April 17th.
This will more than double the PMI cost to FHA borrowers since October.
The Agency has sustained significant losses due to the default rate on the FHA mortgage program and is trying to gain solvency during a time of fiscal chaos in Washington.
THE GOOD NEWS
The FHA program is still the most cost effective mortgage program for the low down payment buyer for the following reasons:
1. Lower credit standards than conventional programs
2. All Down payment funds can come from gift
3. No rate/price adjustments for credit score, property, or loan to value. Conventional rate adjusters can be significant for lower credit tiers, loan to values, and property types.
4. Increased loan limits. $523,750 in most areas.
Bobbie Files, C.D.P.E.
Certified Distressed Property Expert
Your Bristol and Plymouth County Realtor
508-238-5000 x.296 Office
508-521-9480 Direct / SMS
888-570-9907 Toll Free Direct Fax
bobbiefiles@kw.com Email
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