FHA a division of the U.S. Department of Housing and Urban Development or HUD has increased their mortgage insurance premiums for FHA insured mortgage loans. Effective April 9th, 2012 an FHA loan with a term of 30 years and a down payment of 3.5% requires a 1.75% Upfront Mortgage Insurance Premium and a monthly mortgage premium of 1.25%. For a $100,000 mortgage the FHA fee would be $1750 dollars and $104.17 per month.

This increase means higher closing costs and more difficulty to qualify due to higher debt to income ratios.

If you have a higher credit score it would be my recommendation to look at a Conventional Loan first and see if it would be a less costly loan to get into.

Contact me to learn more.