Spring 2011 Mortgage Trends
Handing over house keys
Watch for rising mortgage costs

FHA raises premiums
4 of 7
FHA raises premiums

Borrowers who opt for an FHA loan insured by the Federal Housing Administration, or FHA, will face higher costs.

Effective April 18, the FHA plans to raise its annual mortgage insurance premium by one-quarter of a percentage point on all 15-year and 30-year loans.

The extra quarter point is intended to bolster the FHA's congressionally mandated capital reserves.

On average, borrowers will pay approximately $30 more per month, according to the Department of Housing and Urban Development, which says this "marginal increase" would be "affordable for almost all homebuyers who would qualify for a new loan."

Parkes has a different take, saying the increase will push some borrowers' debt-to-income ratio beyond the allowable limit to qualify.

"Thirty dollars," he says, "can make or break a deal nowadays."




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