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FHA Home Loans

FHA home loans is changing the way that they do business. It does not matter if you are looking for Los Angeles new homes and other California Mortgage Loans; It will cost you a bit more for a loan with them because their fees have increased. It does not matter if you are refinancing home loans in California or refinancing home loans anywhere in the country, FHA fees have went up from previous years. The good news is that not by too much.

To put this into perspective. At this time the up front fee that FHA is charging is 1.75% and a yearly fee is 1.25%. What this means is that on a $200,000 home loan, the upfront extra fee added to the loan is $4,500, while the monthly mortgage fee is calculated by multiplying the loan amount $200,000 time .5%, which is $1000 then divide by 12 to get he monthly fee. In this case that would be $83. A $204,500 loan at 5% carries a monthly payment of $1,098 and after you add the $83 monthly fee you realize a total monthly payment of $1,181.

FHA Fees are going up!

The same $200,000 loan will have a 1.75% upfront fee making the total loan amount $202,000, but the monthly fee will be raised to 1.25% of the loan amount divided over 12 months. In order to calculate that, take $200,000 times 1.25% = $1,800 divide by 12 to get the monthly fee = $150 extra each month. Since a $202,000 loan at 5%  = $1,084 and after you add the $150 your final monthly payment will be $1,234

I realize that this is a lot of math for some folks, but the bottom line is simple. Before the monthly mortgage payment on a $200,000 FHA loan would be $1,181 and now it is $1,234. Consequently FHA payments have gone higher.

Even with the last FHA Fees raise, it is still reported they are struggling making ends meet. It would not surprise me if they did another fees increase at some point in the future. If you are looking for a Los Angeles Home Loan, we are several other mortgage programs that you can still buy a home with a low down payment and avoid the high fees FHA has.

Check out www.MortgageConsumer.com/MI for more information on these and other programs.

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