The Biden Administration announced an action that can save you a lot of money if you were thinking about buying a home with a FHA. There is no doubt that the after price in the Dallas-Forth Area has increased due to low supply. And this has definitely been the case for many first time home buyers.
That is why this action for the White House can mean a decent savings for you depending on your loan program.
Currently, with a FHA loan, buyers are only required to put down at least 3.5% down. And because the buyer is not putting down 20%, the buyer will be charged a mortgage insurance premium in interest points in the amount of .85%. Due to the recent action by the Biden administration the amount will now be .30%.
This change can amount to decent savings for buyers looking to purchase a home in the future. For example:
- A family buying a home with a $300,000 mortgage will save $900 per year
- A family buying a home with a $400,000 mortgage will save $1,200 per year
- A family buying a home with a $500,000 mortgage will save $1,500 per year
When working with my clients, I always tell them to pay more attention to their estimated monthly mortgage payment instead of the price of the home. But this give you a good idea of the annual savings and how that can affect your monthly mortgage payment.
This premium reduction will be effective March 20, 2022.
If you are thinking about buying a home this year, click here to book a call to discuss what this savings means for you.
As always, your partner in real estate.
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