Recent changes in the real estate world have made becoming a homeowner even more affordable. This change puts homeownership in reach by decreasing the amount you’ll pay on your monthly mortgage payments.
HUD, aka the US Department of Housing and Urban Development, has just reduced its annual mortgage insurance premium rate from 0.85% to 0.55% for most new borrowers, decreasing the amount you’ll pay on your monthly payments.
When a homebuyer puts down less than 20% on a house, their lender will usually require them to carry mortgage insurance until their principal is equal to 20% of their mortgage value. This kind of insurance lessens the risk the lender takes on by protecting the lender in case the buyer defaults on their loan.
However, mortgage insurance is an extra cost that homeowners have to pay. This fee is added onto the standard mortgage payment of principal and interest. Fees like this can add up over time, so that’s why the change in mortgage insurance rates is such great news for homebuyers and homeowners-to-be.
Mortgage insurance allows homebuyers to get into a home more quickly by not having to save up that huge 20% down payment, so many first-time homeowners carry mortgage insurance.
You can take advantage of this change by getting a home loan administered by the Federal Housing Administration or FHA. With the decreased mortgage insurance rate, you can save around an average of $800 per year on your mortgage payments.
If you’ve been waiting for the right time to jump into homeownership, now is a good time to take a look at your situation and see if it’s time for you to buy. This change in mortgage insurance rates is what many people have been waiting for.
You can now get into a home with a low down payment–some FHA loans only need a 3.5% down payment–and a lower monthly payment. This change makes owning a home more affordable while ensuring that you build equity and secure financial stability for your future.
Want to see if now is the right time for you to start your journey to buying a home? Send me an email and I’ll help you look at the different loan and down payment options.