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FHA Cuts Mortgage Insurance Premium For First Time Since January 2015
For homebuyers looking to get a mortgage backed by the Federal Housing Administration, things are about to get easier â€“ and less expensive.
The FHA announced today that they are cutting their annual mortgage insurance premium from .85 percent to .60 percent. National Association of RealtorsÂ® President William E. Brown said the move is an important step for helping low and moderate-income buyers get into a home.
â€śFHA mortgage products exist to serve an important mission: providing homeownership opportunities to creditworthy borrowers who are overlooked by conventional lenders,â€ť said NAR President William E. Brown, a RealtorÂ® from Alamo, California and founder of Investment Properties. â€śThe high cost of mortgage insurance has unfortunately put those opportunities out of reach for many young, first-time- and lower-income borrowers. Now, we have a real opportunity to get back on track.â€ť
FHA mortgages are particularly important because they represent a low downpayment option for buyers, but NAR has said that the high costs of mortgage insurance â€“ a requirement of FHA mortgages â€“ have priced many of those buyers out of the market.
This is a question of simple math,â€ť Brown said. â€śEvery time we cut the cost of mortgage insurance it means more borrowers meet the debt-to-income ratio required to purchase a home. It follows that dropping mortgage insurance premiums today will mean a whole lot more responsible borrowers are suddenly eligible to purchase a home through FHA. That puts more money in the fund to protect taxpayers, and it puts more families in homes so they can live out the American dream.â€ť
Brown noted, however, that additional work is required to give more families an opportunity to utilize the FHA mortgage option. While thanking the leadership at FHA and the Department of Housing and Urban Development, Brown added that eliminating FHAâ€™s â€ślife of loanâ€ť mortgage insurance requirement is another important step that needs to move forward. This policy requires borrowers to maintain mortgage insurance on an FHA-insured property regardless of their equity position, while borrowers with traditional mortgage insurance can typically extinguish their mortgage insurance once they reach 20 percent equity in the property.
â€śHUD and FHA leaders are to be commended for recognizing the need we have before us,â€ť Brown said. â€śOur work continues, but weâ€™re encouraged by todayâ€™s announcement.â€ť
Tony Landaverde, Realtor with eXp Realty says "Contact your local lender or Real Estate Agent if you have any questions. We are all here to help you through the process".
Thank you for this great article entitled "FHA Cuts Mortgage Insurance Premium For The First Time Since January 2015" by Jon Boughtin.
Posted in Legislative & Regulatory
Presented by Tony Landaverde, Realtor
San Antonio, TX Realtor with eXp Realty
A Texas Licensed RealtorÂ® License #607299
For information on careers with eXp Realty click on the link: Tony Landaverde eXp Careers
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