President Obama recently announced a change in the monthly mortgage insurance premium on FHA loans that could have a positive impact on home buyers going forward. FHA’s old rule was 1.35% of the loan as the monthly MIP(mortgage insurance premium). For example, if you were applying for a $150,000 loan the MIP is figured as 1.35% x $150,000, divided by 12 months or $168.75 per month. Under the new rule that same $150,000 loan would be .85% x $150,000 divided by 12 months or $106.25 per month or a savings of $62.50 per month.
If you qualified for that $150,000 loan, the reduction in MIP means you could qualify for a higher priced home based on that monthly savings. There are other changes being discussed such as reducing seller assistance from 6%-3%, but for now an FHA backed loan could be a more attractive option for buyers.
If you want to know more, please contact us at Help-U-Sell Keystone Realty. We’re ready to help you find a home!