The Federal Housing Administration will raise mortgage fees next year. This is in a effort to avoid the potential of a taxpayer bailout. The FHA, a federal program that insures mortgages, currently has a $16.3 billion deficit. The high percentage of mortgage delinquencies the last few years have put the program in a growing deficit.
The FHA is estimated to increase premiums by 10 basis points, which will increase the average mortgage payment by about $13 per month, according to a report by Reuters. The FHA also plans to increase the number of short sales on its loans to avoid having more borrowers going into foreclosure.
The FHA program has been a large contributor to first-time home buyer mortgage funding, and first-time home buyers have accounted for nearly half the home purchases in the current real estate market. FHA insures about 1.2 million mortgages each year, and the number of mortgages it insures have been dramatically increasing.
The FHA administration says it will get creative to avoid having to make a Treasury draw.
If you are currently in the market to purchase and were considering using a FHA mortgage, you could save yourself some money if you get your purchase through before the end of the year!
Brian Webb is a proud Homes for Heroes affiliate for St. Croix Valley. He represents clients in Hudson, River Falls, Stillwater, Woodbury, Oakdale, Cottage Grove, and surrounding Twin Cities Areas! He assists with buying, selling, investing, and property management of your home! He offers free advice and consulting services, contact him at HudsonRiverFallsHomes.com.