In an effort to make Laguna Hills Homes more accessible and sustainable, President Obama announced the Federal Housing Administration (FHA) will reduce annual mortgage insurance premiums (MIP) by 0.25 percentage points. On a $525,000 home loan with less than 5 percent down, this MIP reduction will equate to a savings of $1,208 per year or $6,040 over five years.
FHA annual mortgage premiums are paid in 12 monthly installments every year, and are paid on top of principal, interest and insurance. For new FHA loans, they last for the entire life of the loan, regardless of whether you have more than 20 percent equity in your home.
The announced changes will take the annual MIP from 0.85 percent to 0.60 percent for loans with less than 5 percent down, and from 0.80 percent to 0.55 percent for loans with more than 5 percent down. According to the White House, the lowered premiums will help more than 750,000 homeowners save on their monthly mortgage costs and enable up to 150,000 new homebuyers to purchase a home.
|Annual Savings After the Reduction in FHA Mortgage Insurance Premiums on a $525k 30-yr. Fixed Home Loan|
|Year||3.5% Down||5% Down|
Methodology: We calculated the monthly mortgage insurance premium payment by applying the annual fee (in basis points) to the average annual outstanding balance after accounting for upfront fees, as described by the FHA.
Contact Integrated Realty Group with more questions in regards to your new FHA purchase or streamline refinance .