FHA, Fannie Mae & Freddie Mac Increase in Loan Costs April 2012

As most of you already know President Obama has already initiated a 10 basis point increase on all loans administered by Fannie Mae, Freddie Mac and the FHA. As far as FHA loans are concerned this change will be implemented by an increase of 10 basis points to the annual MIP Premium. In addition to this increase, HUD will be adding an additional 25 basis points to FHA loans that exceed the 625k loan amount for a total of a 35 basis point increase. HUD also discussed the high likely hood of adding another, yet to be determined, sum top of all of this to help shore up the depleted FHA MIP fund.

What does this mean to you?
What this all means is there will be a material increase to FHA financing, especially for loan amounts that exceed $625k and will go into effect in April of 2012. There will be a mortgagee letter released within the next couple weeks to cover all of these details.

If you have been prequalified using FHA financing to acquire a new home, it would be a good idea to consider acting before these changes are implemented in April 2012. After that you may qualify for less and not be able to purchase that home you've had your eye on. Waiting for it to come down before the loan costs go up is a gamble. Do you want to bet the house?