The Federal Housing Administration (FHA)just reduced the cost of its home loans by as much as $800 to $1,400for typical homebuyers. How? Bycuttingthe cost of its mortgage insurance premium (MIP) by 0.30%. That could save you $1,400 a year if you buy or refinance the median-priced $467,700home. The savings for a more modest $265,000 mortgage arestill significant —$800 a year.
Let’s look at what the FHA MIP cut is, the types of FHA loans that got the discount MIP,and some ways you could save on an FHA home loan with expert guidance from Planet Home Lending.
The monthly mortgage insurance premium — that’s the MIP — is the fee FHA charges to guarantee the loans it insures.
The FHA MIP cut reduces the mortgage insurance premium FHA loan borrowers pay each month. While 0.30% doesn’t sound like much, the savings can add up to thousands over the years you have your home loan. And who doesn’t like saving money?
Even before the rate cut, FHA home loans were designed to cost less making homeownership affordable — one of the reasons why they’re so useful to first-time homebuyers. FHA’s premium cut will also make refinancing more affordable for existing homeowners:
This MIP cut applies to most mortgages insured by the FHA, and to common properties, like single-family homes, small multifamily homes (up to 4 units!), condominiums, and manufactured homes.
Additionally, a lower MIP means you may be able to buy a home for a lower monthly payment, or buy a more expansive home for the same monthly payment you would have had before the MIP change. The White House said it made the change to open up the possibility of homeownership to even more Americans.
At Planet, we understand your goals, and we're here to deliver the solutions, resources, and support you need to thrive. That’s why we offer expert guidance for the FHA loan process.
Can’t find an affordable home with the finishes you want in the neighborhood where you want to live? We also offer FHA 203(k) loans, which can be used to buy a home and pay for remodeling or upgrades. That can be excellent option for competitive markets because there’s sometimes fewer buyers bid on these homes than move-in-ready properties.
Planet’s professionals, and our comprehensive suite of lending solutions, allow you to feel at ease throughout the homeownership journey.
There are a number of ways to save with an FHA loan.
The best way to find out is to ask one of our knowledgeable mortgage professionals! We’re ready to assist at any time. We know you have options, so we’re committed to earning your trust.
Given the cost savings FHA loans offer homebuyers, and the new mortgage insurance premium cuts, now might be the perfect time for you to buy or refinance. Get in touch with us today and let’s get started on your tomorrow. It’s time to get you home.