FHA’s new MIP rates are projected to save new FHA-insured homeowners an average of $500 this year.
The
FHA recently announced that it is reducing its annual mortgage
insurance premium by one quarter of a percent (25 basis points)—from
0.85% to 0.60%—for most new mortgages with a closing or disbursement
date on or after January 27, 2017. Today's buyers have a great choice. Buyers who have already found their home will find a slightly lower payment than they expected. Buyers who are still shopping will find that they qualify for slightly more house at the same payment and may have a little more flexibility when negotiating.
This MIP reduction provides two opportunities to home buyers, as shown in the two tables below:
TABLE 1.
In these three sample scenarios, the homebuyer uses the MIP savings to
increase the loan amount and purchase more home than they originally
planned. Note that MIP savings vary, depending on the loan amount.
TABLE 2. In
this sample comparison, the homebuyer’s $240,000 dream home may still
be within reach, even though mortgage interest rates have recently
increased. The $86.80 PI increase is partially offset by the $50.00 MIP
decrease, so the net monthly payment increase is only $36.80.
Credit - Howard Strang, Academy Mortgage Corporation
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