FHA mortgage insurance premium has dropped significantly!
Effective January 26th, FHA has lowered the monthly mortgage insurance premium by 50 basis points on mortgage terms greater than 15 years.
What does this mean to you?
FHA mortgages are attractive to buyers because they allow a minimum investment of 3.5% of the purchase price. This low down payment is particularly helpful to first time homebuyers.
The mortgage insurance premium is a monthly expense associated with your mortgage. The reduction in this monthly payment over the life of your loan will save you money, and assist you in qualifying.
With only a 3.5% down payment required, this new 50 basis point reduction translates to a monthly savings to you of $123 for a $300,000 mortgage.
This is tremendously beneficial to borrowers for qualification purposes as the mortgage industry requires certain debt-to-income ratios when qualifying buyers for a mortgage.
So if you are one of the many who do not have 20% of the purchase price to put down on the home of your dreams, this reduction in the monthly mortgage insurance premium may be just the extra help you need to achieve home ownership now.
If you are interested in learning about how this effects your ability to buy a home in Chatham, Madison, Summit, Short Hills, Livingston, Maplewood, South Orange, New Providence, Berkeley Heights or any other town, give us a call at 973-936-9129 and we will point you in the right direction.