Mortgage insurance premiums on FHA-backed loans will be lowered by 25 basis points on loans endorsed starting January 27!
Sounds great right! - Now you ask, what does that mean? Well for starters is will mean more borrowers are eligible to purchase a home through FHA. Basically - it won’t cost you as much on the monthly payment due to the Mortgage Insurance required on an FHA loan - this could translate to a savings to the average home buyer by as much as $500 per year.
Looking for the Official release? [Click Here to access the article by HUD.gov]
In case you forgot - I know most of us have tried to - a few years back we had a bit of a housing bubble bursting thing that did quite a bit of damage. To help fix that requirements were put in place to make it more difficult to get these types of loans - essentially, making the loans less risky for the government. Now after a few years of solid growth, a review has shown that the insurance funds that protect on defaulting lenders is above where they needed it to be. Now they can make some tweaks and adjustments to relax some of those requirements.
Mind you, we’re not all the way there yet - One drawback on an FHA loan is that you pay that MIP (Mortgage Insurance Premium) over the life of the loan. It doesn’t go away when you build up 20% equity like more conventional loans. Yeah, we’re still working on getting that cleaned up.
But Hey! Good news is Good news! AND, just in time for the Spring Market Baby!
If you are looking to move into your dream home this Spring we should schedule a buyer workshop. It only takes about an hour and can help get you well on the way to owning that home you’ve been looking for!
If you know someone looking to make a purchase - forward this article along, be neighborly!