Mortgage Insurance to Decrease on FHA Loans
Home ownership in the Twin Cities area and across the country is about to become more affordable for many first-time home buyers. The Federal Housing Administration (FHA) recently announced plans to cut costs that are associated with the mortgage it backs.
FHA mortgage insurance was created to protect the agency if the home loan borrower were to default on the loan. Currently the rate is 1.35% of the home loanís value, and it will be getting cut to 0.85% according to a recent statement released by the White House.
"Too many creditworthy families who can afford -- and want to purchase -- a home are shut out of homeownership opportunities due to today's tight lending market," the White House said.
The reduction in rates is expected to save the average first-time homebuyer $900 a year on their mortgage. The White House is estimating that new lower rates will allow 250,000 Americans to buy a new home.
During the most recent finical crisis the FHA had to increase premiums as a result of the increasing number of foreclosures. Now that the housing market is continuing to recover and the unemployment rate is dropping they have once again felt it was time to lower the rate.
If you are looking to buy or sell a home this winter contact me. Our group specializes in Eden Prairie Real Estate,Chanhassen Real Estate,Chaska Real Estate,Lake Minnetonka Real Estate,Edina Real Estateand West Bloomington Real Estate.
Brace Helgeson Coldwell Banker Burnet
Licensed in Minnesota/Lic # 92065