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FHA Mortgage Insurance Premiums (MIP) costs have dropped from 0.85% (annually paid monthly) to 0.55%
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FHA MIP = Save $1,056/year*
*For example, with a $350,000 loan, monthly MI costs drop from $248/mo to $160/mo.
Annual potential savings of up to $1,056/year and a whopping $31,680 over the life of a 30yr loan.
Because FHA mortgage insurance protects the lender from losses from loan default, FHA mortgage rates are usually lower than conforming loan mortgage rates.
A conforming loan is a securitized loan by Fannie Mae or Freddie Mac. Both agencies are government-sponsored enterprises.
Loans involving Fannie Mae or Freddie Mac are called “Agency Loans.”
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Benefits of an FHA Loan
- FHA down payments can be as low as 3.5%
- Gift funds are allowed for the down payment
- Seller contributions to closing costs can be as high as 6% of the sales price
- FHA loan qualifying can be more flexible than other types of loans.
- FHA rates are usually the same for the highest and lower credit scores.
- FHA loans can be used to purchase and renovate a home
- FHA loans can be cheaper than conforming loans
FHA home loans are now more affordable and easier to qualify for due to the lower monthly costs of FHA Mortgage Insurance Premiums.
Here’s the announcement from the White House on Feb 22, 2023.
Contact Steve Silver at Silver Mortgage, at 1-800-920-5720.
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