FHA Loans Just Became More Affordable
In a statement today, the Department of Housing and Urban Development announced that the annual mortgage insurance premium on FHA loans will drop by 25 basis points which is equal to .25% savings to any FHA borrower. This will help ease the effect of the rising interest rates and give a little more buying power or more room in the monthly housing expense. (The cut applies to new mortgages with a closing or disbursement date on or after Jan. 27, 2017).
“Dropping mortgage insurance premiums today will mean a whole lot more responsible borrowers are suddenly eligible to purchase a home through FHA,” William Brown, president of the National Association of Realtors, said in a statement.
The FHA said that it projects that its new premium rates will save new FHA-insured homeowners an average of $500 in 2017 alone.
So what is an FHA Loan anyways?
An FHA loan is a mortgage insured by the Federal Housing Administration. Borrowers with FHA loans pay for mortgage insurance through a Mortgage Insurance Premium (MIP), a self-sufficient insurance fund that protects the lender from a loss if the borrower defaults on the loan. FHA loans are attractive to buyers because they require a low down payment, lower rates and more flexible guidelines.
Please reach out to me for more information on current FHA Home Loan Rates or to find a loan program that is right for you.
Sincerely,
Chris
