Mortgage Myth Busters: March 2011

FHA reminder regarding the monthly mortgage insurance changes

FHA monthly mortgage insurance reminder



FHA announced over a month ago that the monthly mortgage insurance  is changing on some FHA loans and it goes into effect on April 18th, 2011. I wanted to put this important reminder out there because what you can purchase and or what you can afford could change a little.

I talked about such changes regarding the mortgage insurance changes in this article over a month ago. - FHA to increase the FHA monthly mortgage insurance -   Why would this news be so important?



  • Many think about refinancing to reduce their monthly mortgage payment, but haven’t pulled the trigger. This new change could make the difference of not refinancing now. It all comes down to your goals. For every $100,000 in money borrowed, your payment will change about $20 a month for the worse. That amount alone could be your make it or break it point.
  • If buying in a particular neighborhood that you love, has a great school system, and so much more, but let’s say the price range for that particular area is $250,000 or higher.  With this new change, in order to keep the payment the same or depending on your qualifications, the new change would drop your purchasing price power by $9,000. What if the homes in that area just won’t sell for anything less than $250,000.
  • What if you had a specific mortgage payment that you just didn’t want to go over and beyond. This is something that I preach upon when first speaking to a borrower about their financing options.  How much of a mortgage can I afford?I feel that the borrowers goals are very important when making this kind of financing decision. And most of all, that the borrower should have a mortgage payment in their mind that they feel comfortable with. What if you just didn’t want to go over your mortgage payment of $1,800. On a $250,000 mortgage, your payment would increase $50 more a month. I know there are some of us that say, hey, it’s just $50 more. But did you already push the $1,800 a payment the first time around when thinking about this?  Should it have been like $1,700. My point? Just be careful of living beyond your means.


Summary : These new change regarding FHA loans and the monthly mortgage insurance on FHA loans are coming up soon and I just wanted people to be aware. Just keep in mind that you must have a full application in place and then the lender assigns your loan a FHA case number. This has to be done prior to April 18th, 2011 before you are subject to the new FHA monthly mortgage insurance change. If you are sitting on the fence, deciding between two houses, you might want to think a little harder. Just don’t wait until the last minute.






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Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc

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