As the cost of FHA financing continues to go up, Conventional financing is gaining more and more traction with First Time home Buyers. I have an excellent loan officer that offers 5% conventional financing that ends up being a better loan product in most cases than FHA.
FEES charged on mortgages backed by the Federal Housing Administration are set to change this spring; they’ll go up for some and down for others.
In a nutshell, here is what’s happening: Fees for refinancing will fall sharply, as the upfront mortgage insurance decreases to 0.01 percent of the base loan amount, from 1 percent, starting on June 11. For buyers, the upfront mortgage insurance premium will increase to 1.7 percent of the loan amount, from 1 percent, effective April 9, and annual insurance costs, paid monthly, will rise 0.10 percentage points. Those with so-called jumbo loans, those above $625,500, will see a 0.35-percentage-point jump in the annual insurance premium, effective June 1.
The F.H.A. announced these changes over the last several weeks; they reflect an Obama administration initiative to make refinancing easier and more affordable for the three million or so homeowners with F.H.A. mortgages. The reduction in refinancing fees applies to those borrowers who are current on payments.