FHA Raises Fees on Mortgages

On February 27, 2012, the Federal Housing Administration announced mortgages backed by FHA will soon see a rise in fees. In particular, FHA will increase two fees that borrowers pay. Starting April 1, it will increase its annual mortgage insurance premium for all loans by 10 basis points (.10 percent), bringing the total cost from 1.15 percent of the loan amount to 1.25 percent.

Starting June 1, loans above $625,500 premiums will see an increase of an additional 0.25 percent of a percentage point, bringing the total premium costs up to 1.5 percent of the loan amount.

FHA also announced it will raise a fee for the upfront mortgage premium by 0.75 of a percentage point, which will now total 1.75 percent of the loan amount. The new fees will also apply to home owners who want to refinance their mortgages except for those FHA borrowers utilizing the streamline refinance program to reduce their interest rate.

Christine -

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