The White House announced and CNN reported on January 7 2015, that the Federal Housing Administration will make dramatic cuts associated with the costs of mortgages it backs. FHA Mortgage Insurance premiums are designed to protect the agency against borrower default. These rates will be cut from 1.35% to 0.85%.
As a result, a typical first-time home buyer will save $900 a year on their mortgage payments. Existing homeowners who refinance into an FHA loan will see similar savings. “Too many creditworthy families who can afford — and want to purchase — a home are shut out of home ownership opportunities due to today’s tight lending market,” the White House said in their announcement. The reports released estimates that the lower premiums will enable up to 250,000 new buyers to purchase a home.
With prices still low early in January, interest rates still down though threatening to go up, AND MIP is down…it is a good time to get started and get into home ownership for the first time, down-size or up-size or buy that second home at the lake. It is a good time to buy regardless of your situation.