Lower FHA Mortgage Insurance Premium

FHA has announced that it will lower its annual premium on the loans it insures from 1.35% to .85%. for loans with less than 5% down and for loans with more than 5% down, Mortgage Insurance Premium is lowered from 1.3% to .8%. With this new rule, the first-time home buyers can save about $900 a year on their mortgage payments. Same savings will be realized by existing home owners who refinanced into an FHA loan. That is significant savings over the life of the loan.

The annual Mortgage Insurance Premium is paid on top of principal, interest and insurance every month until the end of the loan. 

According to the White House, the lowered premiums will help more than 800,000 home owners save on their monthly mortgage costs and enable up to 250,000 new home buyers to purchase a home. (Source: www.zillow.blog)

Annual Savings After the Reduction in FHA Mortgage Insurance Premiums on a $175k 30-yr. Fixed Home Loan
Year	3.5% Down	5% Down
1 Year	$818	$805
5 Years	$3,932	$3,863
10 Years	$7,421	$7,276
20 Years	$12,669	$12,375
30 Years	$14,709	$14,338

Source: www.zillow.com

If you have any questions with the new FHA rule, do not hesitate to contact me.  

According to CNNMoney, starting April 1, borrowers with ongoing disputes with creditors over debts of $1,000 or more may no longer qualify for FHA insured loans.  The new rule also applies even if the borrower has a perfect credit score.

Borrowers with ongoing debt disputes of over $1,000, would have to pay the remaining balance or enter into a payment plan with at least 3 payments on it.  Payments made must be documented and submitted to FHA, before they can secure FHA mortgages.

FHA will not include the disputed credit accounts from more than 2 years ago or any credits related to reported identity theft.

In FHA study, they found out that many borrowers that are unable to pay their current mortgages had prior credit deficiencies including unpaid collections and other unresolved credit disputes.

Tiffany Thomas Smith, Deputy Press Secretary for the U.S. Department of Housing and Urban Development said, "It's a way of protecting consumers from getting into loans they ultimately can't afford.

For more information, you can check out http://money.cnn.com/2012/03/30/real_estate/FHA-loans/index.htm.  Or you can contact me for any real estate information.