Monday, August 9, 2010

FHA increases fees - buy now before Sept 7!!

The Senate on Wednesday gave the Federal Housing Administration the go-ahead to raise monthly fees that borrowers pay the agency.

The annual fee is expected to raise from the current rate of 0.55 percent to 0.9 percent of the total loan. The bill also gives the FHA the authority to raise the annual fee as high as 1.55 percent.

So what does this look like :-

Based on loan of $200,000 at 5% (Click on picture to get a clearer view)

Simultaneously, the agency plans to lower the loan initiation fee that was raised from 1.75 percent to 2.25 percent earlier this year. Officials would like to drop the up-front fee down to 1 percent of the total mortgage amount.