FHA is preparing to hike their insurance rates (their form of PMI) in April. Back in October of 2010, FHA raised their monthly mortgage insurance premiums from .55% on a 30 year mortgage to .90%. This cost homeowners an increase of about $40 per month on a $100,000 mortgage. They are at it again...this time bumping rates an additional .25% or about $25 per month on a $100,000 mortgage.
New regulations are also calling for a potential increase to Conventional Loan business (loans backed by Fannie Mae and Freddie Mac). Currently Conventional loans can be provided for as little as 3% down...but more commonly 5% down. The proposal would raise the minimum down payment to 10%.
If you are interested in buying, it makes sense from a monthly payment perspective to buy in the next few months given these new pending increases (not to mention interest rates have gone up a full 1% since last November---3 short months ago).
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