How will likely FHA fee increases affect Hamilton County home buyers? Beginning April 1, 2012, FHA mortgages will get a little more costly, that's how.

Dollar SignProposed changes to FHA loans include an annual Mortgage Insurance Premium increase of 0.10% for loans under $625,500, bringing the cost up to 1.25% of the loan. Upfront Mortgage Premiums will increase by 0.75 %, bringing the premium total to 1.75% of the loan amount. These premium changes only apply to new 30-year, single-family loans insured by the FHA. Refinancings will not be affected.

Federally-backed FHA loans are a popular choice for home buyers looking for low downpayment options. FHA loans only require a 3.5% downpayment. That's a significant savings, particularly for first time home buyers who may lack the funds for the larger downpayment associated with Conventional Loans - typically a minimum of 5% down and often as much as a 20% downpayment.

Here's how much more Hamilton County home buyers can expect to pay for an FHA loan when the increases go into effect:

$150,000 loan @ 3.875% interest rate = approximate $18/month mortgage payment increase
$200,000 loan @ 3.875% interest rate = approximate $24/month mortgage payment increase
$250,000 loan @ 3.875% interest rate = approximate $31/month mortgage payment increase

So for a $200,000 loan, that's about $288 a year. Not a lot of money, but enough that if you are seriously in the market for a new Hamilton County home and you plan to use an FHA loan, you might want to get your loan pre-approval before April 1!

Search all Hamilton County homes for sale.