FHA Loan is Going to be More Expensive
On April 18, 2011 FHA loan is going to be more expensive. Life’s basic necessities like the fuel, costs of gas, and food continue to rise, but the cost of shelter, is a different story. According to the National Association of Home Builders (Wells Fargo/NAHB) Housing Opportunity Index and the National Association of Realtors composite Housing Affordability Index, in the 20 years since it has been measured housing affordability rose to its highest levels. The two major determining factors of these indices are housing cost and income. Housing Opportunity Index and Housing Affordability Index are a standard of the financial ability of US households to buy a home.
Currently, FHA loans are a common form of home financing for many households. FHA loan is a Federal Housing Administration mortgage insurance backed mortgage loan. FHA loan is provided by FHA-approved lenders. To get an FHA loan, need a mortgage insurance premium (MIP), divided into two types of mortgage insurance: the monthly MIP and the up front MIP.
The monthly MIP will be higher thanks to new premium requirements starting April 18, 2011. The increase will be $33.33 per month to a $200,000 loan amount with 3.5 percent down payment and a 30-year loan.