From a recent announcement by the Cincinnati Area Board of Realtors we get some confirmation that loans are going to start costing more money. It's a big increase when you see what it does to your monthly payments
HUD Mortgagee Letter 11-10 includes an announcement from FHA regarding an increase to the Annual Mortgage Insurance Premium on standard FHA loan programs and a change that affects case numbers.
Here are the 7 things you need to know about these changes:
1. These changes are effective April 18th, 2011.
2. The Annual Insurance Premium will increase .25% for standard forward mortgages*. The Upfront Mortgage Insurance** remains at 1.00%.
3. The Annual Premium was .90% is now 1.15% for LTVs GREATER than 95% on 30-year loans
4. The Annual Premium was .85% is now 1.10% for LTVs EQUAL to or LESS than 95% on 30-year loans
5. The Annual Premium was .25% is now .50% for LTVs GREATER than 90% on 15-year loans
6. The Annual Premium was 0% is now .25% for LTVs EQUAL to or LESS than 90% on 15-year loans
To illustrate, on a home priced at $163,000 with 3.5% down, the monthly payment was $118 per month and is now $151 per month-- a $33 per month increase.
I believe we'll start to see these types of changes in all types of loans - Banks have been tightening up their requirements for some time, but now they are going to start requiring more money down, and still charging you more - even if you have the money to put down.