New FHA Guidelines

Beginning on April 1st there will be new FHA Guidelines for home buyers. I know there has been some confusion and alot of talk about how this will impact home buyers and most importantly how much the new guidelines will ultimately cost. Here is quick look at what the changes will be to the FHA Guidelines:

  • Monthly Mortgage Insurance: currently 1.15% - will increase to 1.25%
  • Up front Mortgage Insurance Premium: currently 1% - will increase to 1.75% (this fee is rolled into the loan)

If we were to take a $150,000 loan amount as an example at the current guidelines the fees would look something like this:

  • Up front Mortgage Insurance Premium: $1500
  • Monthly Mortgage Insurance expense: $143.75
  • Monthly Principle and Interest payment: $745.28
  • Total monthly payment: $889.03

After April 1st when the new FHA Guidelines go into effect, here is what the fees will change to:

  • Up front Mortgage Insurance Premium: $2625
  • Monthly Mortgage Insurance expense: $156.25
  • Monthly Principle and Interest payment: $750.82
  • Total monthly payment: $907.07

The difference between the current guidelines and the new FHA Guidelines is less than $20.00 per month. Although none of like change, the new FHA Guidelines are not as bad as they might appear at first glance. In addition, interest rates are at ridiculously low figures and housing prices have never been better. Even with a slight increase to the FHA Guidelines, it is still a fantastic time to buy a home. If you or someone you know if considering a purchase, please contact me today. Nate@NatesHomes.com or 602-942-7000.

This communication is provided to you for informational purposes only and should not be relied upon by you. Nate Martinez and RE/MAX Professionals are not a mortgage lender and so you should contact a compnay who provides mortgage product(s) directly to learn more about its mortgage products and your eligibility for such products.