April 12th, 2011 11:37 AM by Jennifer McGuire
If you are contemplating purchasing a home sometime in the near future, and might be getting an FHA loan, you need to know the PMI (private mortgage insurance) rates will be going up beginning that date.
What does this mean to you? The current rate is 1% of the loan amount, it will increase to 1.5% beginning April 18, 2011.
If you borrow $100,000 now, your PMI would be $100 a year. If you wait until after the 18th of April, it will be $150 a year.
PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI