Tuesday, August 24, 2010

Higher rates for FHA mortgage insurance

The Wall Street Journal reported today that the FHA is raising monthly insurance premiums on loans with less than 20% down. The rates will almost doulble from 0.55% per year (on the loan amount) to 0.9%. For an average home this will translate into about $500 per year. At the same time the upfront insurance premium will drop from 2.25% to 1% of the loan amount.

Also the maximum amount that a seller can contribute to the sale is dropping from 6% to 3%.

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