What an exciting week in real estate!
If you follow real estate news, or if you’ve been anywhere near a television or computer this past week, you’ve probably heard people talking about the FHA lowering its fees associated with a home loan. Specifically, the FHA has lowered its annual mortgage insurance premiums by 50 basis points, from 1.35 percent to 0.85 percent.
If you know anyone in real estate or lending, you may have heard them talking excitedly about how this is going to make it easier for first-time homebuyers! Lower mortgage insurance premiums are going to allow people to afford more home on the same budget!
This topic was a non-stop source of conversation in our Charlotte sales rally on Monday morning! There was a ton of excitement as we took a closer look at how much money this change could save a person or family each month and each year.
To that point, President Obama said during a speech last week that it will save a homebuyer as much as $900 a year!
The President has been an advocate of making it easier for qualified buyers to buy homes and to help first-time buyers by strengthening the FHA. This directive from him last week seems to have been a big step in the right direction. In fact, HUD secretary Julian Castro said this action will make homeownership more affordable for over 2 million Americans in the next three years.
When you also consider the fact that interest rates are the lowest they’ve been since May of 2013, this has been a big week in the world of real estate.
Show me the numbers
Let’s take a look at exactly what this means for an FHA buyer. The folks over at Zillow have crunched the numbers for us, so here we go:
“On a $175,000 home loan with less than 5 percent down, this MIP reduction will equate to a savings of $818 per year or $3,932 over five years,” according to the Zillow article.
The lower mortgage insurance premiums also make housing more affordable for those first time buyers who weren’t comfortable with an extra $50 a month or so in their mortgage payment. It helps those buyers who just weren’t happy with what their budget could get them in last year’s real estate market. Maybe it adds an extra 500 square feet of space or another bedroom and bath for visiting guests. Lower mortgage payments or more space could be exactly what first time homebuyers desire. Lower MIP will help them fulfill this dream!
On the fence?
If you are one of those people who has been waiting for the right time to buy a home, or if you’ve been waiting for that next raise so that you can afford to buy the home you need for you and your family, now is a great time to talk with a loan officer.
We can put you in touch with one of our preferred lenders in your area who can discuss with you the best type of home loan for your personalized situation. And if you decide that now is the time to buy your home, we hope we can show you around our homes! We love helping people realize the dream of home ownership!