New FHA rules coming

FHA has faced large losses due to economic conditions and people losing jobs. In order to help with some of the losses they are increasing the upfront mortgage insurance to 2.25% from the current 1.75%. This is not the first time FHA has increased the mortgage insurance. At one point in the 1990's the rate was 3.25%. This increase makes no difference in the amount of cash needed at closing and works out to be on average 4.00 more per month. FHA is a great way to buy a home if you have less than perfect credit scores, and have limited cash.