Minnesota FHA203K
FHA Upfront MIP Increasing to 2.25%
April 5, 2010 by Financemyhome · Leave a Comment
Due to an increase in foreclosures, FHA finds itself needing to increase the cost of mortgage insurance. The upfront MIP is increasing from 1.75% to 2.25%. FHA allows borrowers to purchase a home with 3.5% down. The borrowers using FHA often don’t have a lot of reserves or ability to put more down. The lack of financial resources coupled with a shaky economy has led to an increase in foreclosures. The insurance premiums are used to cover the mortgage losses. The monthly insurance cost of .55% of the loan will remain the same.
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