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“This is a fiscally responsible measure to price our mortgage insurance in a way that protects our insurance fund while preserving the dream of homeownership for credit-qualified borrowers.” Julian Castro, U.S. Housing and Urban Development (HUD) Secretary
The FHA (Federal Housing Administration) has seen an increase in their reserves and is now passing that positive monetary flow to potential buyers. The reduction comes by way of a quarter percentage less on mortgage insurance premiums. The people most affected by this will be low to mid income households.
FHA Mortgage Insurance premium reduction begins January 27, 2017. According to the NAR (National Association of Realtors) annual premiums will drop to 0.6 percent from 0.85 percent. We like those savings!
What that means for home buying is more borrowers as many of these buyers will be first time home buyers. As we remember, the economy went into a tail spin when new buyers realized the mortgages they were carrying they actually couldn’t afford. This time around we have greater regulations and hopefully a strong memory of economic past to not make the same mistakes twice. In any case, the new TRID laws allow for borrowers to see very clearly just how much and in what way they are borrowing.
At James N Brown Pa. we are well versed in just these types of closing and will guide new home buyers in every stop of this process. We have a great resource in our closing calculator as well as in our staff’s knowledge. We are constantly getting reeducated and staying on top of the latest real estate law changes as well as real estate title and closing . Even better, we love what we do!