FHA reduces Annual Mortgage Insurance Premium | Mortgage Mondays #85. https://www.mattthemortgageguy.com 916-529-7600 This episode I talk about FHA's announcement to decrease thier monthly mortgage insurance premium. Effective on all mortgages with a closing/disbursement date on or after January 27, 2017...
Matt the Mortgage Guy Mortgage Mondays episode 85. What I talk about the FHA reducing their monthly mortgage insurance premiums.
Matt the Mortgage Guy Mortgage Mondays episode 85. FHA has done it again. They have reduced their monthly mortgage insurance premiums. For those of you who thinks it sounds familiar, it does. They did it back in January of 2015 when they reduced them from a 1.35% to a 0.85%.
Well they have done it again from 0.85% to a 0.60% that is on a standard FHA 0.35% down. There is a scale and there are different monthly insurance premiums for different down payments and things like that. But the most common FHA loan 3.5% down, the mortgage insurance premium has gone down 25 basis points, which is basically 0.85 to 0.60% of the loan amount.
Just to give an idea of what that would mean on a FHA loan of $300 000.00 under the old mortgage insurance premium scale 0.85% of that would be $2550 a year which is $212 a month as of January 27th, 2017, anything closing after that date is going to have a mortgage insurance premium of 0.60%. So, that same $300 000.00 loan is going to be $1800 a year in mortgage insurance, monthly insurance premiums is $150 a month.
Long story short; $300 000.00 FHA loan you’re going to save about $63 a month. So not only are buyers that are using FHA going to save, but they are also going to qualify for a little bit more since the payment is less on what they are qualifying for currently.
They are going to have a little bit more purchasing power.
So, it is great news for first time buyers. Working with a lot of first time buyers myself a lot of them are looking at FHA 3.5% down vs conventional 5% down. Two years ago, when FHA lowered it for the first time, a lot of buyers where looking at these two loans and it was close. It was neck in neck on which one was the better thing for them.
It still is a good idea to sit with somebody who knows what they are doing and figure out based on your scenario which loan is best for you. You're going to look at your down payment, your credit score, some other factors having to do with how long you are planning to stay in the home and such.
But this change for FHA is going to be a great change for buyers using the FHA loan. Which a lot of my first-time home buyers are. So, great news.
If you have any questions about the change. Feel free to reach out my direct number is 916 529 7600.
Matt the Mortgage Guy look forward to hearing from you.
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