Recently announced by the FHA is that borrowers will need to continue paying the annual mortgage insurance premiums for longer than it currently requires now. In some cases it could be the entire life of the loan costing borrowers thousands of dollars more than what they pay now. This change only applies to new loans with case numbers beginning on June 3rd. Anything prior to that will be under the current rules and be thousands of dollars cheaper. Unless you have a lot of extra money to throw out each month, the time to act is now!
Because of the time required to get a loan approved, mortgage experts are recommending that you apply before May 24th. The sooner the better says Minnesota Mortgage Broker Sean McLean. He expects that the closer to the deadline the busier people in his industry will be trying to get these loans done before the rule changes takes effect. To avoid running out of time and sacked with thousands in extra fees he recommends you act as early as possible.
Under the current rules the FHA lets you cancel your mortgage insurance any time after 5 years once you own at least 80% of your house. For someone with a loan to value (LTV) ratio over 90%, the FHA will collect this fee for the life of the loan. If you only borrow 78-90% of LTV you will continue to pay the fee for at least 11 years, and until you get to 78% LTV. This is quite an expensive difference from the current rules.
If you are looking for a Minnesota Mortgage, act now and save thousands of dollars over the course of your loan.