1st Home Network, Inc.
Mortgage Rates Fall from 1.35% to .85%
Since an earlier post on changes to the mortgage insurance premium component of federal government home loan programs, a number of mortgage lenders have sent information to me summarizing the changes. To recap, mortgage insurance premiums paid on a federal mortgage loans (FHA for example) will be reduced from 1.35% to .85% effective January 26.
Brenda Hajicek of Edge Home Finance in the Blaine/New Hope office provided a good explanation of what this means to home buyers. She explained it this way, “the mortgage insurance premium (a component of the monthly mortgage payment on an FHA mortgage loan) was lowered by 65% of what the government normally charges.” This means that the monthly mortgage payment on a $225,000 FHA loan dropped by $93.75 per month yielding a savings of $33,000 over the life of the loan (usually 30 years).
Is this confusing to you? What you need to know is that this is big stuff. These changes will save you a lot of money and make government loans such as FHA a meaningful option to new home purchasers and/or those looking to refinance. So if you want to buy a home and don’t know how or you want to understand the process and the language, take a Home Stretch class. We teach people how to buy homes right and save money. Oh, you don’t have any money to buy a home? We also teach you how to get free money. To purchase tickets to a home stretch class please visit our eventbrite.