[quote=Huckleberry][quote=HLS]June 11, 2010
(On a $400K loan the monthly charge would go from $183 to $500)
**[/quote]
HLS, you meant annual charge, not monthly, correct?[/quote]
Annual premium would go from $2200 to $6000.
I cannot imagine that this will pass as proposed. It will not help the artificial market the govt is desperately trying to protect.
FHA is like assigned risk auto insurance, it allows people with very little money and a low credit score to get a mortgage. It may get more expensive. They may be facing huge losses that have not been disclosed yet.
With a decent credit score, Fannie/Freddie are far better loans, but you need a higher credit score to qualify for 5% down. The mortgage insurance premium needs to be factored in as well.
The real fear is that FHA has allowed people to buy homes in the last few years who will default if the market continues to fall and people remain unemployed.
There was no need for FHA loans prior to 2007 when 100% financing, stated income and 2nds were available. They were a tiny part of the financing market. Less than 5% (?) Recently I think that FHA is around 35%.
