While the exact specifics are not clear the Senate approved FHA regulation changes that will allow for FHA to increase the cost of getting mortgage insurance. It appears that the changes that will go into effect on September 7th will allow for a reduction in the upfront fee from 2.25% to 1% ( sounds good right!) But the monthly factor will change from .55% to .90%. On average it will mean about $38.00 more per month on a $200,000.00 loan amount. The actual bill will allow for a monthly factor increase of up to 1.50 but early indications are that FHA will only raise to the .90 monthly factor. These changes coupled with the new opportunities to obtain 95% conventional private mortgage insurance could signal a change in the FHA dominance in the market place.
You need an "educated" realtor and lender to make the right decisions and make the transaction as smooth as possible.
