The real skinny on FHA's big change

So by now you have heard about the drop in annual mortgage insurance premiums for FHA loans from 1.35% monthly to .85%monthly premium when using the three and half percent minimum down payment for FHA loans .

Lower FHA MIPFirst let's get this out the way, in my opinion, homeowners with current FHA loans may benefit very little from this change if you bought with the insanely low interest rates of the last couple years.  The monthly cost savings of the lower MIP at a higher interest rate even if  slight may not be enough to reset the clock and incur the cost of a refinance. But I could be wrong so you want to check your scenario click here for a consultation, after all the numbers don't lie!

The biggest winners are todays home buyers.You will have the benefit of more buying power and lower payments. Those of you in the middle of processing a  FHA home loan transaction and want to take advantage  of this new premium are able to cancel your current case number (assigned to each FHA loan at time of application) and request a new case number starting the 26th of January. Now if your closing is on the 30th of the month then this may not be such a good idea. Your case numbers are eligible to be cancelled and reassigned but be mindful as you try to keep more money in your pocket you could be taking more money out of someone else’s like the seller, as closing dates may need to be extended to accommodate the changes.

I have a current loan in process with a sales price of $304,000 by switching to the new FHA premiums available on the 26th they will go from $322 per month in mortgage insurance down to $202 per month in MIP. The 120 bucks savings a month means a great deal to these first time buyers and probably you too.

 

 

If you are thinking of buying a home the time really is NOW, we say it all the time but the stars have aligned in your favor, if you take action. Interest rate increases as small as of a quarter percent or more could diminish your buying power and monthly savings you would gain in buying today versus tomorrow with a FHA Loan.

 

 Want to know how this change could benefit you? Click here to schedule a no cost consultation today. 

Contact Markita Aldridge-Woods at (703) 929-2274 or via email for custom tailored mortgage solutions.

 

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Comment balloon 1 commentMarkita Woods NMLS#196099 • January 12 2015 07:10PM

Comments

The drop in the FHA MIP will save one of my clients who is buying a home in Boise $92 a month.  They were tight on ratios so that is HUGE for them.

Posted by Jim Paulson, Owner,Broker (Progressive Realty (Boise Idaho) www.Progressive-Realty.info) over 2 years ago

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