I just read an interesting article at Inman.com. It was talking about FHA is opening the door to homeownership for more borrowers.
The FHA is planning on reducing the annual mortgage insurance premium most home owners pay by a quarter of a % point.
Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages. FHA requires both upfront and annual mortgage insurance for all borrowers, regardless of the amount of down payment.
FHA is the federal housing administration, just in case someone needs clarification.
Low to middle income homeowners will get a boost in 2017. Hopefully a whole lot of responsible borrowers are going to be able to purchase homes through the FHA.
Every time they cut the cost of mortgage insurance it means more borrowers meet the debt to income ratio.
Some borrowers could save as much as $500.00 a year.
Why this is good news … the FHA makes it possible for banks to lend to borrowers who might not qualify for conventional mortgages. The FHA requires as little as 3.5% down payments.
As always if you are interested in buying a house check your credit score. Probably the most important part of buying a house is checking with a lender to find out if you are qualified to buy a house.
If you are interested in a FHA loan you can either go on their website or do some research or contact a lender that handles FHA loans.
I am not trying to sway people to FHA loans. As with probably everything check around with different lender for different programs. Depending on your circumstances some programs will work better for you than other ones.