FHA Buyers Just Got a Gift from HUD

Saving Money Every Month

Great news for anyone looking to buy a home with an FHA loan

The Department of Housing and Urban Development (HUD) has just lowered the mortgage insurance premium (MIP) by 30 basis points, which means that for every $100,000 borrowed, the MIP will now be $30 lower every month.

So, what exactly is mortgage insurance premium, and why does it matter? Well, when you take out an FHA loan, you're required to pay MIP, which is a type of insurance that protects the lender in case you default on your loan. The MIP is paid in monthly installments and is typically included in your monthly mortgage payment. The amount of MIP you pay depends on the size of your down payment and the length of your loan.

With this recent decrease in the MIP, FHA buyers will save money every month on their mortgage payment. For example, if you're looking to borrow $400,000 to buy a house, your monthly payment just got $120 cheaper. That's $1,440 a year that you'll be saving!

A lower MIP means that you may be able to afford a more expensive home or have more money to put towards other expenses, such as home improvements or savings.

Of course, it's important to keep in mind that this decrease in MIP may not apply to everyone. It's always a good idea to talk to a lender and get pre-approved for a loan to see what kind of rates and terms you qualify for. An experienced lender can help you navigate the complex world of mortgages and find the best loan for your unique situation.

In conclusion, if you're an FHA buyer, this is definitely good news! With a 30 basis point decrease in the MIP, you'll be saving money every month on your mortgage payment. And who doesn't love having a little extra cash in their pocket?