FHA to increase mortgage insurance premiums

The Federal Housing Administration plans to increase the cost of up-front mortgage insurance

premiums by three-quarters of a percent to restore the agency's insurance fund that has been consumed by the mortgage crisis. Annual premiums required on the loans will also increase.

As per FHA Acting Commissioner Carol Galante the increase will apply only to new 30-year, single-family

FHA loans and won't affect the cost of streamlined refinancing,

The higher premium will add about $5 per month to the cost of a typical $150,000 FHA loan and increase the

agency's revenue by about $1 billion a year, Galante said. The increase will take effect April 1.