Mortgage Increase due to increase
The Senate is preparing to pass FHA Reform ACT of 2010. It has some good features that will improve mortgage financing; however, it also contains a very concerning mortgage insurance increase proposal that could have detrimental effects on the housing market.
The proposed increase of FHA's annual mortgage insurance premium from 0.55% to 1.55% would reduce a homebuyer's purchasing power.
Here's why: FHA's current annual premium is 0.55% (up from 0.50% just two months ago in April). A proposed 1.55% annual premium would have huge negative impact. For example, a borrower's monthly mortgage insurance premium on a $250k loan amount would be $115/mo. A 1% increase would raise the monthly mortgage insurance to $323 per month!
This bill has been passed by the House and is headed to the Senate for passage. Please tell your Senator to say NO!
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