New borrowers who get an FHA Mortgage Loan will soon have to pay a higher initial mortgage insurance premium (MIP). The new premium will be 2.25 percent of the total amount of the loan, up from the 1.75 percent that has been set nearly a year earlier.
In December of 2009, the FHA was insuring 5.8 million homes that had a total loan balance of greater than $750 billion. More than 500,000 of the loans were seriously delinquent and heading toward foreclosure. Many of these bad loans were made in 2007 and 2008 as the market was plummeting.
The initial MIP increase will go into effect this spring.
