It sounds like a big increase but if you look at the actual monthly change it's not going to matter to most buyers...
From Ryan Dailey at Prosperity Mortgage:
Please be aware that, effective April 5th, the upfront mortgage insurance on all FHA loans will increase from 1.75% to 2.25% of the base loan amount. Case numbers must be ordered before the 5th to avoid the increase. Case numbers are ordered when the appraisal is ordered.
Since buyer's finance this fee by rolling it into the loan amount, this will not increase the cash required for settlement.
Examples:
Current Scenario
300,000 loan amount + $5,250 funding fee = $305,250 total loan. Monthly payment $1,638
Scenario Effective April 5th
300,000 loan amount + $6,750 funding fee = $306,750 total loan. Monthly payment $1,646
The monthly payment went up by $8/month.
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