FHA Lowers the Cost of Mortgage Insurance
Good news for buyers! If you’re purchasing a home this year with a Federal Housing Administration loan, you’ll enjoy significant savings on mortgage insurance. Designed to protect the agency in case a borrower defaults on a loan, mortgage insurance has historically been quite pricey and a barrier to many folks wanting to buy a home.
In an effort to make purchasing a home more affordable, the FHA will be reducing the cost from 1.35% of a loan’s value to 0.85%. This equates to roughly $900 per year for the average borrower. Already own a home? If you’re refinancing this year with an FHA loan, you’ll also find similar savings.
FHA also recently announced that they’ll be reducing the minimum down payment from 3.5% to 3%. Kudos, FHA, for helping to make housing more affordable for many deserving borrowers!