Blog

FHA PMI Rate Reductions Cancelled

We were so happy to announce a few weeks ago that the FHA monthly PMI rates were going to drop later this month. However, an important change has taken place. Last Friday, the Trump Administration announced that FHA PMI rate reductions were cancelled.

A Freeze to All Pending Regulations

The White House issued a memo freezing all pending regulations from the Obama administration. This includes, among other things, the reduced FHA PMI rate reductions. The rate reduction, which was supposed to go into effect on January 27, 2017, would have reduced PMI rates by 0.25%. As we mentioned in our blog from a few weeks ago, this would have saved homeowners money every month. On a $400,000 loan, the savings would have been roughly $100/month. The savings would obviously have been much greater for higher loan amounts.

Impact of FHA PMI Rate Reductions Being Cancelled

If you were recently pre-approved, or had your FHA pre-approval details updated earlier this month, you should have your lender check your figures. The amount for which you are pre-approved is dependent on the monthly payment including principal, interest, taxes, and insurance. If your loan officer took into account a reduced PMI rate, then this must be corrected. Your pre-approved purchase price will likely be a little bit lower as a result.

What the Future Holds

The sudden cancellation of the PMI rate reductions was met with much criticism. However, it is too early to tell whether this new administration will end up dropping the rates later on, after review. For home buyers looking to purchase a home with an FHA, the silver lining is that should a rate reduction occur in the future, an FHA streamline refinance may be possible to take advantage of lower PMI rates.

 

 

 

It's only fair to share...Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestEmail this to someone
About Chris Graves

I grew up in Massachusetts, spent the majority of my young adult life in Boston, and own a home in Windham NH. I have owned properties in MA and NH. I specialize in mortgage lending in Massachusetts and New Hampshire and my company does have the ability to lend in other states. I graduated from the University of Massachusetts in Amherst Massachusetts in 2002. I have a Bachelor’s in Science. In addition to managing a team of loan officers my personal loan production is always in the top of the entire of company. I have personally been in the mortgage business for over 13 years. I pride myself with taking my clients from application to close in the smoothest and quickest way possible, while keeping them well informed during the entire process. I originate my own loans from start to finish and work hand in hand with my loan processors & underwriters to make sure I am updated to the minute with all of my files. I stay up to date with lending guidelines and speak with underwriters on a daily basis to ensure I am aware of all of the lending guidelines in place.

Ask Chris A Question..

Please fill out the form below and I will follow-up with you promptly.

* indicates required field