Good news for buyers using an Federal Housing Administration (FHA) loan and making a down payment of less than twenty percent! Annual mortgage insurance premiums just dropped significantly in price, from 0.85% to 0.6% of the loan balance. The recent change, announced January 9th, is expected to save the average homeowner approximately $500 per year.
The surprising move was welcomed by most real estate professionals, as rising interest rates threatened to squeeze first-time buyers out of the competitive real estate market. As the President of the National Association of Realtors, William Brown, explains, “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.”