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FHA MIP cut by .5% – Big Savings for New Homebuyers

Last month Fannie Mae announced the return of the 97% LTV Loan Program.  This week, FHA announced it’s cut to the FHA MIP premium by .5%.  “If you want to call it a tennis match between Fannie and the FHA, they just returned Fannie’s serve,” said Chris Freemott, an executive at Midwest Equity Mortgage in Oak Brook, Illinois.

Big Savings for Homebuyers

The FHA MIP cut drops the annual mortgage insurance premium from 1.35% of the loan amount to .85%.  Based on a national average of home values, that’s about $900/year savings.  However, in an area like Orange County, CA the savings is expected to be considerably higher. As you know, FHA offers lower down payment requirements, greater income, asset and credit flexibility.  The FHA MIP cut and translation of savings in a high-cost area like ours will certainly be a “go-to” option again for those in need of it.

Game. Set. Match?

Almost!  Those who have FHA loans currently in process can also take advantage of the FHA MIP cut.  Beginning January 9, 2015, FHA will allow case number cancellations for 30 days.  Even better, the FHA MIP cut will apply to those current FHA homeowners who plan to refinance!  An FHA MIP cut to an existing FHA loan may look like this: .5% on a $400,000 = $2000 savings each year!

Finding the Right Loan for You just got easier!  With the FHA MIP cut buyers and current FHA homeowners now have access to more affordable home loan options!

Finding the Right Loan for You just got easier! With the FHA MIP cut buyers and current FHA homeowners now have access to more affordable home loan options!

Mortgage access has widened and so has the opportunity for first-time homebuyers.  When you’re ready, contact me for a complete review of your mortgage profile.  Ensuring that your options have been carefully presented is a task I most certainly enjoy.


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