FHA loans become more affordable: In a move to help make FHA loans become more affordable, President Obama announced yesterday that the annual mortgage insurance premiums on FHA loans is going to be reduced by half of a percent.
While that may not sound like a big deal, it is, especially for first time homebuyers on tight budgets. This could save a first time home buyer about $50 per month on a $150,000 house if my calculations are correct (contact an Albuquerque mortgage lender to verify this).
The announcement is part of the Making Homeownership More Accessible and Sustainable directive.
According to Brad Yzermans Mortgage Blog, one of the goals of the program is to increase the level of home ownership from 64% of Americans to more historically normal level of 69%.
There’s been a lot of chatter lately about the millennial generation and how they can be stimulated to get into home ownership. I think this is a great step to help them. I’ve personally experienced this scenario frequently over the last year: young, first time home buyer wants to find a house to call their own, but with their student loan debt they are limited in what they can afford. I’ve seen the decision to buy a house or not buy a house come down to less than $50 per month several times. This program will definitely help people like that.
The savings is even greater on higher priced properties. On a $300,000 house it can be as uch as $125 a month. That’s not chump change.
To read more about this please visit Reuters.com website: http://www.reuters.com/article/2015/01/07/usa-housing-fha-idUSL1N0UM18T20150107
Here’s two quotes from that post:
“In a statement, the White House said the reduction was part of President Obama’s efforts “to expand responsible lending to creditworthy borrowers.”
The administration also will be taking additional steps over the coming months to “cut red tape and clarify lending standards” to make mortgages more affordable and accessible to creditworthy families, the White House said.”
And here’s one last link to an article that explains more about the why: http://mymortgageinsider.com/fha-mortgage-insurance-premium-mip-reduction-01-09-2015/
Politics aside, it all sounds very good to me!
by Albuquerque Real Estate Agent Rich Cederberg, eXp Realty (505) 803-5012.