Feb
06

FHA to Increase Mortgage Premiums for Real Estate in Chicago

February 06, 2013

chicago mortgage lender imageThe Federal Housing Administration (FHA) recently announced that it will soon be increasing its mortgage insurance premiums.

This news is especially important to first-time home buyers, since in 2012, about 78 percent of the FHA’s loans were issued to first-time homebuyers. Additionally, according to Realtor.com, four out of 10 first-time buyers purchased their home with a FHA mortgage.

Yearly mortgage insurance premiums will increase by 0.10 percent and will increase by 0.05 percent for loans higher than $625,500. The FHA is also tightening up their down payment requirements for loans greater than $625,500 as part of the new protocol. Instead of 3.5 percent down, borrowers will have to put 5 percent down.

Homeowners with FHA mortgages will no longer have the option to cancel premiums once more than 22 percent of a loan’s principal is repaid, and instead, will be required to pay premiums based on the unpaid balance for the remainder of their loans.

At the end of 2012, the FHA was left with a $16.3 billion deficit due to problems associated with mortgage loans issued between 2007 and 2009. The new guidelines are a cautionary measure to prevent even further losses.

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Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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