MortgageJaw.com

Yes, the cost of an FHA mortgage is going up for any new case id numbers ordered past September 7th, 2010. The mortgagee letter has not come out yet but it was passed through congress (HR 5981) for this to take place. Here is the break down:

Old:

2.25% Upfront mortgage insurance premium

.55% Monthly payments

NEW:

1.00% Upfront mortgage insurance premiums

.85 to .90% monthly and HUD could raise to 1.55% max when needed.

Well, you might be thinking this is a good deal  because the UFMIP went down a lot and monthly barely went up…….well think again. Here is a video showing how this is just increasing the costs a lot more for homebuyers.

http://www.thinkbigworksmall.com/mypage/archive/1/52542/

And for those of you who just want the math, here you go:

Examples  OLD WAY:

$200,000 mortgage

$204,500 with UFMIP (2.25%)

$1,098 per month P&I (5% rate)plus $94 monthly MI(.55%)

Equals: $1192 a month

NEW WAY after September 7th, 2010:

$200,000 mortgage

$202,000 with UFMIP (1.00%)

$1084 per month P&I (5% rate)plus $152 monthly MI (.90%)

Equals: $1236 a month

Sooooooooooo………$1236 – $1192 = $44 increase per month.

This is a good reason of why anyone who is getting an FHA mortgage should get it done before September 7th, 2010 or they will be paying more for their financing. Hope this helps and would like to hear what you think.