Steffan Blaser's Lake Oroville Real Estate Blog

FHA MIP (Mortgage Insurance Premium) will be going up  Monday April 5 to 2.25%, up from 1.75%. –up 1/2% (so as an example–for $100k loan– that means $500 will be added to the loan amount) and since private mortgage insurance is pretty much gone–at least there is still the  available option, FHA.  Just in case you didn’t know - the MIP  is not funded by the government, it is funded by the homebuyers who (buy in) with their up-front mortgage insurance premium and their monthly payment of  MIP as well. It does add to the cost of the monthly payment, but if you don’t have the 20% down payment for a conventional loan at least you have that as an option, if you want to buy a home using the 3.5% down FHA loan. It appears that FHA (Federal Housing Administration) is making these changes to make sure that the MIP still keeps lenders comfortable with them knowing the insurance for them is still there if the buyer ends up in default (so it lessens their loss as a lender). Without that security of the insurance for the lenders– probably all loans would be at least 20% down payment or more. So pretty much anyone who wants to buy a home  that they will live in— I still say now is the time to buy your home.  Interest rates are climbing.  FHA has petitioned Congress to raise the minimum down payment from 3.5% to 5%.  So that is probably coming, just not yet.— Happy Easter.  — Buy Buy Now.