It was just recently released that the mortgage insurance rates for FHA loans is reducing. This will assist individuals now in the market to buy and will allow borrowers with current FHA mortgages to refinance with lower mortgage insurance. In this blog are a few facts on on MA FHA loans reduced mortgage insurance rates.
Beginning January 26, 2015
MA FHA loans reduced mortgage insurance rates are effective on January 26, 2015. This means that any new FHA case numbers requested on or after that date will have the new rate. Case numbers are typically received when a mortgage application is processed. For loans in progress, you may be able to cancel the existing FHA case number and request a new number. Specific steps must be followed by your mortgage company to achieve this. Regrettably, closed loans do not qualify. Refinancing would be required.
MA FHA Loans Reduced Mortgage Insurance Rates
MA FHA loans reduced mortgage insurance rates are one-half a percent below previous mortgage insurance rates. Rates can be different based on the loan to value percentage. For loans with 5% down or greater, the mortgage insurance premium was 1.3% and is now lowered to 0.8%. For loans with less than 5% down, the old mortgage insurance was 1.35%, compared to the lower 0.85% rate.
Impact of the Reduced Mortgage Insurance Rates
Monthly mortgage insurance is calculated by multiplying mortgage insurance and initial loan value, and dividing by 12 (months). For a home buyer with a minimal down payment, the mortgage insurance on a $100,000 loan lowers from $112.50/month to $70.83/month, saving $41.67/mo. On a larger loan of $400,000, the reduction is $166.67 per month. With the reduced mortgage insurance rates, a home buyer pre-approved for $400,000 might get a higher mortgage amount of $420,000. Thus, this rate change not only makes real estate buying more affordable but may also help buyers to get into a higher-priced property (if desired).
Assistance with FHA Loans in MA
MA FHA loans reduced mortgage insurance rates is just one of many changes that continually take place in the lending industry. Your loan officer is an important resource to keep you up-to-date with current alternatives and help you through the mortgage process. As a Sales Manager at Sierra Pacific Mortgage Company, I can put my experience to work for you. You may reach me at 978-376-5389 or christopher.graves@spm1.com.