If you are looking for a home your lender and Realtor® may have notified you by now, but in case they have not, or in case you have forgotten, if you are going to take advantage of the current 1.75% up front mortgage insurance premium you need to do so quickly. As of April 5th the cost of up front mortgage insurance will be increased by .500%. That could increase your cost to borrow by thousands of dollars.
Let’s look at an example:
| Purchase Price | 225,000.00 | Purchase Price | 225,000.00 |
| FHA Base Loan | 217,125.00 | FHA Base Loan | 217,125.00 |
| Current UFMIP @ 1.75% | 3,799.69 | New UFMIP @ 2.250% | 5,062.50 |
For the sake of calculation let’s use a note rate of 5.000%. Now, consider you may be paying interest on that financed UFMIP. Instead of $1,262.00 in additional costs for financing you will be paying an additional $358.80 over the next 7 years. So, the total cost of finding a home and putting it under contract on April 6th vs April 5th in this example would be roughly $1,620.80.
This is surely not enough to warrant putting a contract on a home that you will be unhappy with over time. It is, however, a pretty good reason to act swiftly when you do find a home you like. It is also a good reason to get out now and look before the change occurs.
Posted by marktapp 
