If you need FHA financing for your new home, you should get it now!

If you want to buy a house with a  minimal  down payment by using an FHA mortgage, it will cost you more after April 1st, 2013.

FHA is the Federal Housing Administration, the largest source of low-down-payment mortgage money in the country. Its minimum down payment is just 3.5 percent, compared with anywhere from 5 percent or higher from conventional sources. For decades, FHA financing has made home ownership possible for first-time buyers with modest incomes and  blemished credit history.

Starting April 1, FHA‘s annual mortgage insurance premiums for most new loans will jump by one-tenth of a percentage point.

FHA also announced that as of June 3, it is rescinding its policy of canceling mortgage insurance premium charges for borrowers once their loan balance drops to  78 percent of the original amount. This will force FHA customers to pay premiums for as long as they keep their loans.

This contrasts private mortgage insurance, where homeowners can request cancellation of premium payments once their loans hit the 78 percent mark.

When shopping for a loan, make sure your loan officer runs the numbers comparing FHA with privately insured conventional alternatives. The conventional loan with private mortgage insurance may be the less expensive option in the long run.

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