The Federal Housing Administration announced plans to increase the cost of up-front mortgage insurance premiums beginning on April 1, FHA Acting Commissioner Carol Galante said yesterday in a call with news reporters.

What does this really mean for you the consumer?

It will cost a little bit more upfront to buy a house.

The current upfront mortgage insurance rate is 1% and that will be changed to 1.75% on April 1st.

“After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster the FHA’s capital reserves and help private capital return to the housing market,” said FHA Commissioner David Stevens in a statement. “This quarter point increase in the annual MIP is a responsible step toward meeting the congressionally mandated 2% reserve threshold, while allowing FHA to remain the most cost effective mortgage insurance option for borrowers with lower incomes and lower down payments.”

If you have an FHA loan you’ve been waiting to refinance, do it now.

If you’re in the market for a new home using an FHA loan, you’ll need to be in a signed contract before April 1st to have the current, lower mortgage insurance fees. If you are thinking it will take you longer to find the right home or you aren’t ready yet, we take run different scenarios to show you how this change will affect your payment.