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Company Owners - Ralph & Martha Howard
RDH Services, LLC dba The Home Buyers Realty (888) 932-0506 BuyWiseTN@comcast.net http://www.TNDirectRealty.com Listed by: RDH Services, LLC - A TN Discount Flat Fee Real Estate Company |
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FHA has announced another increase in their mortgage insurance premiums.
These premiums are charged to borowers as insurance against default. FHA is required to maintain a certain level of capital reserves to protect against losses, and a consequence of some of the recent economic problems has been that the capital reserve levels have fallen.
FHA feels that it is necessary for another increase in the insurance premiums to bring more capital into its reserve accounts.
The changes take effect in April 1, 2012.
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Effective |
Annual MI Rate |
Monthly charge for $150,000 loan |
Up front Mortgage Insurance |
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April 1, 2010 |
1.25% |
$156.25 |
1.75% |
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April 1, 2011 |
1.15% |
$143.75 |
1.0% |
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October 1, 2010 |
.90% |
$112.50 |
1.0% |
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Before October 2010 |
.50% |
$62.50 |
2.25% |
This is the 3rd increase since October 2010, a 2.5X increase in the premium charge over the last 18 months.
This time the increase in the monthly premiums is accompanied with an increase in the upfront premium.
A subtle point in the news release is that "FHA will continue to permit financing of this charge into the mortgage." Financing the upfront premiums for mortgage insurance has been standard practice for government lending with FHA, VA, and USDA Rural Development lending.
I am taking that to mean the question of not allowing the upfront mortgage insurance to be financed was discussed. It suggests that the possibility that in the future the option to finance those upfront premiums might no longer be available.
FHA is considering also at possibly reducing the seller concessions allowed for a purchase. This change will have greater impact on families purchasing homes less that $100,000.
It looks like the push for tighter lending standards for government home financing programs will continue. FHA will still be a good home loan program option for many buyers, but it will be more expensive. Buyers should take advantage now of low rates and low home prices.
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Beautifully Remodeled Home in Harrison Tn.
Closest Thing To Heaven Here On Earth Historic Missioniary Ridge Beautiful Country Home- Bring Your Horses Downsizing or Just Starting This Home is For You
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Katherine Ann Davoren
Crye-Leike Realtors (423) 443-0891 kdavoren@msn.com http://kathydavoren.crye-leike.com Listed by: Crye-Leike Realtors |
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Beautiful East Brainerd Home
Historic Missioniary Ridge Beautiful Country Home- Bring Your Horses Beautiful East Brainerd Home Downsizing or Just Starting This Home is For You
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Mortgage rates continue to be historically low. This home for sale in Hixson, TN, is a great example of how affordable your new home payment can be. Terri Rule with Re/Max Properties North is the listing agent for this property.
The payments shown are for a conventional 5% down payment with standard mortgage insurance and with lender paid mortgage insurance. You can compare these payment options with an FHA loan that has a lower down payment requirement.
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Many home buyers indicate that they do not like mortgage insurance, but mortgage insurance is what makes it possible to purchase a home with less than 20% down payment. Many home buyers though are not aware of the different options for mortgage insurance premiums.
By considering the different options home buyers can select the mortgage insurance option that best suits their budget and long term plans.
Terri Rule is having an open house for this home on Sunday, October 2, 2011. Call her at 423-994-3993 with any questions about this great home for sale in Hixson.
Call me, 423-280-0345, with any questions about your home purchase financing and your different mortgage insurance options. Visit my HomeBuyer YouTube channel to learn more about home buying programs.
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