One-Month Window for Home Buyers
September 1st, 2010 | 
Author: The Federal Housing Administration (FHA) is allowing homeowners and buyers until October 4 to lock in a low monthly insurance premiums. After October 4, the monthly insurance premiums on FHA loans will increase by over 63%.
What is the point?
You are purchasing a $150,000 home using a $145,500 FHA mortgage before October 4 you would pay an insurance premium of $66.69 per month. If you wait until after October 4, the insurance premium would jump to $111.58. Using this example your monthly payment after October 4 will be $44.89 higher. This will affect your housing and debt ratios.
Good News?
After October 4th the upfront premium will drop from 2.25% to 1% which is typically paid by the seller or rolled into the mortgage. This will benefit those that are looking to refinance their mortgage or those that are only forecasting a three year horizon in their home.
Conclusion
In the short term the increase in monthly premiums will have little impact on the your ability to obtain a new mortgage unless you are extremely tight on your ratios today. I see a greater benefit to those that are reviewing their refinance options.
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