February 28th, 2012 8:35 AM by Preston Ware
FHA announced recently that they will up there fees again. Already I have been hearing comments about the monthly mortgage insurance premium being higher than say 4 years ago and here we go again. This time around the big increase is in the mortgage insurance that is financed into the loan.
Currently, the monthly factor we use is .0115 times the loan amount. That is going to .125, The financed portion will be going from 1% to 1.5%. None of my borrowers seem to mind the financed portion but when I am refinancing borrowers who got there loan, say in 2008, I hear about it because sometimes this will make or break a refi.
This information courtesy of the New York Times
In defense of FHA, they are doing these changes in an effort to make sure there is money in the coffers for future lending and expansion. FHA is now supporting 40% of all borrowing that is going on and most likely will continue to increase as Fannie /Freddie continue to price themselves out of the market.
Another interesting aspect of today's market is that we are seeing more cash buyers than ever. In the same New York Times article it states that 30% of all home purchases are in cash. My sources tell me that number is closer to 50% tp 60%. Those 1% CD rates just don't seem as attractive anymore so customers are putting money back into their homes!