New FHA Changes to Help Homebuyers

Obama recently announce that there will be changes to FHA mortgage insurance coming towards the end of January where the mortgage insurance will drop from 1.35 percent to .85 percent. Mortgage insurance has continued to increase from .55 percent to 1.35 percent since 2010. This new structure will save borrowers an estimated $900 a year annually which is substantial due to the fact that the mortgage insurance stays through the life of the loan now unless you can refinance out of an FHA loan into a conventional loan.

There have been many buyers who have not been able to purchase a home because mortgage insurance can significantly add to your monthly mortgage payment. For example, if you were currently purchasing a home for $400,000, the monthly mortgage insurance would be over $400 in addition to your mortgage payment. The hope is to further help the housing market.

For anyone who would like more information, please let me know and I will refer you to one of my amazing lending partners.