FHA Increases the Cost of Homeownership

Effective April 18, 2011, the cost of a new FHA loan will rise. The US Department of Housing and Urban Development (HUD) has announced that all new case numbers requested as of April 18th will include an increase of 25 basis points on the monthly mortgage insurance.

FHA Changes in Lake County, IL

As of the figures published for February 2011 by Realtor.com, the median cost of a home in Lake County, IL was $257,900. Based on these numbers, after April 18, 2011, anyone purchasing a home and utilizing an FHA mortgage, the monthly payment will cost an additional $53.42. This change does not affect homeowners who currently have an FHA loan, but only those applying for one after April 18, 2011.

Obama Administration Stepping Back

Recently the Obama Administration outlined its plan on the future of housing finance. The plan states that the administration is uncomfortable with the level of government-backed mortgage loans and want to reduce their exposure in the future (5 to 8 years). This increase is believed to be one of many changes coming in the future to make FHA financing (government-backed) less attractive and shift mortgage financing products to conventional products (not backed by the government).

Salvatore “Tory” Campanella (NMLS #199911) is a fifty year banking veteran with the past twenty years spent specializing in residential mortgage lending. Tory is a Senior Loan Officer with Supreme Lending and can be reached at 224-425-4414 or via email at Tory.Campanella@SupremeLending.com. Tory makes his home in Antioch, IL.