New measures to reduce the cost of FHA mortgages go into effect in March

The Biden administration has announced new measures it says could help make home buying and ownership more affordable for hundreds of thousands of people.

The plan will cut mortgage insurance costs by 30% for buyers who take out Federal Housing Administration-backed mortgages from 0.85% to 0.55%. The cut could save 850,000 homebuyers and homeowners, who are averaging $800 in FHA loans this year, the Biden administration said.

The program starts March 20th.

Mortgage insurance is an additional cost that homebuyers have to pay if they have paid less than 20% when buying a property. While the mortgage insurance attached to some home loans disappears after homeowners pay off a certain amount of their loan balance, the mortgage insurance associated with these FHA loans remains until the entire mortgage is paid off, unless the buyer has not contributed at least 10% of the time of purchase.

Of course, homeowners can always refinance an FHA mortgage.

FHA mortgages are designed for low- and middle-income homebuyers because they require lower down payments and provide more flexibility in terms of loan requirements than conventional mortgages.

The announcement comes as home prices remain unaffordable in many parts of the US. By the end of last year, the median home price had reached $467,700. Combined with rising interest rates and shrinking supply, barriers to homeownership have only risen for the most financially vulnerable buyers.

“A home represents financial security, an opportunity to build wealth and capital that can help your child finish college, afford a retirement, create intergenerational wealth in your family,” Vice President Kamala Harris said at an event in Bowie, Maryland, where The program was announced on Wednesday.

Content Source

Dallas Press News – Latest News:
Dallas Local News || Fort Worth Local News | Texas State News || Crime and Safety News || National news || Business News || Health News

Related Articles

Back to top button