If you are looking into buying a home, you might know that FHA Annual mortgage insurance premiums (MIP) will be required for the life of the loan on the vast majority of FHA transactions. If MIP is not required for the entire term of the loan, MIP will now be required for a longer term (11 years) when it was not required before. These changes are effective for loans that receive a Case Number after June 2. This, combined with the recent rise in interest rates, might make customers consider a slightly higher down payment and a conventional loan instead of FHA.
The picture below is an example of the different loan options assuming a 765 Loan Score, a down payment of $12,250 (7% down) and a loan amount of $162,750. The comparison shows the difference in Payments between an FHA loan and a conventional loan with Borrower Paid, Single Premium and Lender Paid Mortgage Insurance that some lenders offer and some do not. If you have more questions, please contact me and I can help you find a mortgage broker to help you answer all of your mortgage questions.