FHA Cuts Mortgage Insurance Premiums
The Federal Housing Administration has released a letter announcing that they will be lowering the FHA annual mortgage insurance premiums (MIP) effective for FHA loans closed on or after January 27, 2017. FHA is very popular with first-time homebuyers.
In the letter, FHA indicated that the agency strives to achieve the appropriate balance between meeting the needs of the borrowers FHA loans were created to serve, and the minimization of risk to the FHA Insurance Fund. FHA's announcement lowers the annual premiums by 0.25% for 30-year loans and 0.20% for 15-year loans.
The up-front premium remains the same at 1.75% of the loan amount. In addition, there is no change with regard to the policy concerning the cancellation of MIP premiums, which means that loans with less than 10% down are not eligible for cancellation of the annual premiums in the future. The new annual premium on 30-year loans is 0.60% for loans with a down payment of less than 5.0% and 0.55% for loans with a downpayment of 5.0% or more.
If you would like a flyer which covers the 2017 changes in the industry, including loan limits and Rural Housing Fees, contact us.