FHA stands for Federal Housing Administration. They provide a government insured loan program which allows a borrower to finance up to 96.5% of their home purchase. This is beneficial for first time home buyers who do not have a lot of down payment.
Part of the cost of FHA financing is their up front mortgage insurance premium which is charged on all FHA loans. This premium will be increasing from 1% to 1.75% effective April 1, 2012. If you finance more than 95% of the purchase you also have annual premiums which will increase from 1.15% to 1.25%. The annual premiums will also be higher for loan amounts exceeding $625,500 effective June 11, 2012.
Moral of the story. If you need to get an FHA loan, get one soon.
For more information on financing or real estate contact us :(808)739-4174 | www.choicehomeshawaii.com