APR is 1.6% higher for FHA?

jim20j · ‎07-30-2013

Received my Truth In disclosure and the Apr stated is 6.1% while the Interest rate is 4.5%. Now I;ve see it up to 1% higher but isn't 1.6% excessive?

amount financed is $250k

ShanetheMortgageMan · ‎07-30-2013

APR's are getting much higher on FHA loans due to the annual MI staying on for much longer than previously. MI (and PMI on conventional loans) is considered a finance charge, and the longer it stays on for, the more finance charges there are over the life of the loan... thus the higher APR.

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Shogun · ‎07-31-2013

@ShanetheMortgageMan wrote:
APR's are getting much higher on FHA loans due to the annual MI staying on for much longer than previously. MI (and PMI on conventional loans) is considered a finance charge, and the longer it stays on for, the more finance charges there are over the life of the loan... thus the higher APR.

I just got under the wire for my PMI not to be the length of the loan.

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tdrjustus3 · ‎08-01-2013

Me too

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