Attention buyers! Now is the time to purchase that home you have been considering. To counterbalance the Temporary Payroll Tax Cut Continuation Act of 2011 and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, borrowers will soon face higher fees.
Effective April 1, 2012, the upfront mortgage insurance premium (UFMIP) will increase from 1 percent to 1.75 percent. This will increase borrowers’ monthly mortgage payments since it is driving up the loan amount. The monthly mortgage insurance premium (MMIP) will also increase by 10 basis points.
After June 1, 2012, all home loans over $625,000 will see an additional boost of .25 percent, bringing a total increase of 35 basis points to their MMIP.