Basis Points for FHA Loans Reduced
The FHA has just announced a significant reduction in the mortgage insurance premiums on FHA loans! FHA loans are federally insured loans which are great option for first time homebuyers and are more lenient on down payments, credit, and income requirements. These programs were created to increase homeownership. Because FHA loans are insured by the government, they are less risky for lenders and have lower rates. However, they still require Mortgage Insurance to help protect the government in the form of monthly MIP or Mortgage insurance premium. Here’s the great news: This week, it was announced that the mortgage insurance on FHA loans will be reduced by 30 basis points effective immediately. The MIP was previously set at 85 basis points meaning for ever $100k financed, loan holders would pay $70/mo. Now that number is reduced to $45/mo. That may not sound like a big difference but consider a real example. On a $400,000 loan, homeowners will now save $1200 per year! If you have an FHA loan currently and want to lower your payment or buy a house and take advantage of these savings, give us a call today!