FHA Class to Lower Your Mortgage Insurance Payment

Everyone knows the FHA mortgage insurance premiums are higher than other mortgage programs, and their Upfront Fee that they charge is pretty high as well.  Since the market collapse in 2008, FHA had to reimburse banks of buyers who left their home, were foreclosed, etc., and their “pool” of money was depleted.  Over the last few years they increased these premiums and made the PMI last the whole loan, in an effort to replenish the “pool”, which worked.  There are arguments to lower the premiums, but to do it in a smart way, so FHA is in the process of rolling out a Class homebuyers can take to lower their premiums, but it is not anywhere close to being finalized right now.

This class will lower their Upfront Fee (paid at the closing) by 30%, lower their monthly PMI by about 10%, and if they are not late in the first 1.5 years, then it will drop by another 11%.  The 2nd piece is the more important factor as the lower the PMI, the more home they can afford. 

Right now the fees are what is prohibiting most buyers from qualifying for they would like, but with these changes eventually coming down the road, this could open up the market again to these buyers.

What do you think about this possibility?

Keith Turner

860-444-0650

keitht@mccuemortgage.com