By Angela Martin, Senior Mortgage Consultant at Movement Mortgage

April 1^st 2013 the annual mortgage insurance premium will increase with case numbers assigned on or after April 1, 2013.

What  does this means for you? The first biggest change is that if you borrow more than 90% of the property value, you will have mortgage insurance for the life of your loan. If you borrow less than 90% the mortgage insurance will be on the loan for at least 11 years before falling off.  Previously, the mortgage insurance would fall off once you reach 78% of the property value but not with the new changes.

The new changes will also affect your pocket book because the monthly mortgage insurance premium is going up for both 30 and 15 year mortgages. For example, on a $100,000 loan the current monthly mortgage insurance would be $100.00, under the new rules, the mortgage insurance would be $112.50 a month.

In order to avoid having these changes affect your loan you need a sales contract in place prior to April 1, 2013. You also need to make sure that your lender has a case # assigned to your application prior to April 1, 2013. You do not have to close prior to that date; only have a sales contract in place. If you are doing a FHA loan for a new construction property, then you need to have a case # assigned before April 1, 2013 the case # would then be good for the next 6 months and you can receive the earlier, reduced mortgage insurance premium.

Make sure you are working with a lender that understands all of these new changes and new programs. Having the right lender and real estate agent on your side could help save you money.