To assist the housing market in its recovery, President Obama announced a major new step that his Administration is taking to make mortgages more affordable and accessible for creditworthy families. The Federal Housing Administration (FHA) will reduce annual mortgage insurance premiums by 0.5 percentage point from 1.35 percent to 0.85 percent, with all new FHA case numbers as of January 26th. This reduction will be for Loan amounts ≤ $625,500 and Loan to Value > 95.00%. Here’s what it means for FHA borrowers… Borrowers who use FHA loans pay an Upfront Mortgage Insurance Premium at the closing table and an Annual Insurance Premium each month that is lumped into their monthly mortgage payment. This Annual Premium is what the FHA plans to reduce and will save FHA borrowers money on their mortgage payment. For example, on a sales price of $275K and a minimum down payment of 3.5%, a borrower will reduce their required payment by $109.56 on their monthly mortgage payment!
Posted on: Fri, 09 Jan 2015 19:23:53 +0000
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