Buyers in Parker, Colorado will now see a higher cost to their annual mortgage insurance premium. Mortgage insurance is generally required when a borrower doesn’t have 20% down payment for a home loan. If a person doesn’t have 20% down, there is an upfront mortgage insurance premium as well as monthly mortgage insurance.
The upfront mortgage insurance premium remains unchanged at 1%, but the monthly premium is increasing by .25%. FHA Case numbers assigned on or after April 18, 2011 are affected by this increase. The old premium with 3.5% down was .90% and the new premium is now at 1.15%
So what does that really mean? It means the monthly payment will cost more therefore buyers will be able to afford less!
For example:
$300,000 home purchase
$10,500 3.5% down
$217.13 MIP (old amount) per month
$277.44 MIP (new amount) per month
$60.31 ADDITIONAL COST PER MONTH
Jared Carlson, Realtor, Your Castle Real Estate
