Just a few short months removed from the last increase in the monthly MIP, here we go again.  The last increase took us from 0.55% to 0.90% (annually) on a 30 year fixed with 3.5% down.  This next increase is an accross the board 0.25% increase, so this will take us from 0.90% to 1.15% on a 30 year fixed. 

What does this mean in terms of your monthly payment?

For each $100,000 borrowed on an FHA loan, your monthly payment will increase by $20.83.  In Atlanta, Georgia using the maximum FHA mortgage amount of $346,250, that would mean a monthly payment increase of $72.14 per month.

Why is this increasing?

The word is that the FHA reserve fund continues to head in the wrong direction and they will continue to make these types of course corrections until they stop the bleeding.

How can I avoid this increase?

There is still time to avoid the increase.  You will need to obtain an FHA case number on or before April 17, 2010.  That means that you will need to determine which property you are purchasing prior to that to avoid the increase - or if you are refinancing, you will need to start the process and have your lender order a case number before this date.