Tuesday, May 7, 2013

Is FHA Lending Dead?

The Federal Housing Administration (FHA) has rolled out several changes as of late. Many of the changes are related to Mortgage Insurance policies for FHA loans.

All FHA loans carry two types of Mortgage Insurance (MIP) - Upfront MIP and Monthly MIP. Back in April 2013, FHA made its first major change by increasing Monthly MIP premiums. This change will affect all FHA borrowers moving forward.

Another key change, set to happen in June 2013, is the elimination of cancelling Monthly MIP. Previously, when FHA borrowers reached 20% equity in their home, they were allowed to cancel their Monthly MIP. For any loan with a case number assigned after June 1, 2013, they will no longer be allowed to cancel their Monthly MIP, for the life of the loan.

Many believe these changes are aimed to deter borrowers from selecting an FHA loan. However, many people are overlooking one of the major benefits of an FHA mortgage – it is assumable. When and FHA borrower chooses to sell their home, their FHA mortgage can be assumed by the new buyer. The key to this assumable feature is the interest rate.

Currently, FHA mortgage interest rates are at historic lows. If predictions hold true, we may not see those interest rates come this time next year. While there are additional costs to an FHA mortgage, having the assumable feature could be a huge contributor to resale value. If interest rates increase, as they are predicted to do so, someone could purchase your home at a guaranteed low interest rate – a rate that may not even be available with points.

United Home Loans provides Illinois mortgage loans in addition to mortgages in Indiana, Michigan, Minnesota and Wisconsin. Check out our rates below and call us with any mortgage related questions at (708) 531-8388.


Illinois Mortgage Rates
IL 30 Year Fixed mortgage as of May 8, 2013 3.490%/3.500 APR
IL 15 Year Fixed mortgage as of May 8, 2013 2.625%/2.694 APR

Please click this link for APR assumptions and more IL mortgage rates


Indiana Mortgage Rates
IN 30 Year Fixed mortgage as of May 8, 2013 3.490%/3.500 APR
IN 15 Year Fixed mortgage as of May 8, 2013 2.625%/2.694 APR

Please click this link for APR assumptions and more IL mortgage rates


Michigan Mortgage Rates
MI 30 Year Fixed mortgage as of May 8, 2013 3.490%/3.500 APR
MI 15 Year Fixed mortgage as of May 8, 2013 2.625%/2.694 APR

Please click this link for APR assumptions and more MI mortgage rates

Minnesota Mortgage Rates
MN 30 Year Fixed mortgage as of May 8, 2013 3.490%/3.500 APR
MN 15 Year Fixed mortgage as of May 8, 2013 2.625%/2.694 APR

Please click this link for APR assumptions and more MN mortgage rates


Wisconsin Mortgage Rates
WI 30 Year Fixed mortgage as of May 8, 2013 3.490%/3.500 APR
WI 15 Year Fixed mortgage as of May 8, 2013 2.625%/2.694 APR

Please click this link for APR assumptions and more WI mortgage rates


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