FHA MORTGAGE INSURANCE PREMIUM
FHA mortgage insurance premium is being reduced starting March 2023. This affords the first time buyer that is on the fence financially for home affordability and access to stability and wealth creation of homeownership with hikes in the mortgage interest rates. This premium is based on the sales price of the home. For example a 460,000 home you can save approximately 110 dollars a month.
This fee was established after the 2005 foreclosure and short sale season to offset the banks loss. There is no mortgage insurance premium using a conventional loan and twenty percent down and using a VA loan. However using a conventional restrictions apply to qualify for that loan and can change from time to time. Of course, cash is king. As per the Consumer Financial Protection Bureau you have the right by law to request from your lender to cease making this additional monthly payment once you have paid off 78 to 80% of your loan. Click link to learn more https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/#:~:text=You%20have%20the%20right%20to,when%20you%20received%20your%20mortgage.
FHA mortgage insurance is put into place to protect the risks of the banks loaning money to a borrower that will default for some unknown reason.This is why additional monies is collected from the borrower using this type of loan. This is not considered homeowners or mortgage life insurance provided the buyer dies.
Check with your local lender for more in's and out's.
This is a huge savings especially for a first time buyer with limited funds as every penny can count that can lower a monthly mortgage payment. Bottom line this reduces you monthly payment and can be a make or break deal for the home of your dreams. On the average demographically this can save you at least 800.00 per year. On a 300k mortgage you save 900.00 per year. On a 400k mortgage you save 1200.00 per year and on a 500k mortgage you save 1500.00 per year. This is just one element that can reduce your monthly payment. The other is creative financing by lenders to get you in a home, again check with your local lender. The National Association of Realtors has been struggling since the mortgage rate spike. The national association of realtors has been struggling for this to take even more stress of borrowers for using a FHA loan. This is great news! Especially in the inflation stage America at this point in time. Look for your trusted advisor and realtor to guide through the buying process.
As a trusted advisor, professional realtor and retired military veteran I am here to serve you and always on the pulse of the housing market for the Dr Phillips area and Central Florida area. Always stay in tuned, educated and connected in this volatile housing market to purchase or for the sale of your home. In the absence of trustworthy up to date information, real estate decisions are increasingly being driven by fear, uncertainty and doubt. We as trusted advisors drive the real estate community to ensure you are making the right decision. So don't let this shifting housing market delay your dreams, data reveals home values typically appreciate over time and that gives your net worth a nice boost. If you are ready to start your journey contact me today at 850 496-6412 to help begin a new walk to home ownership and all of your real estate needs. Tik Tok Kevin Strawter each Friday for a highway of information.