Breaking News: FHA Lowers Mortgage Insurance, Helping More Homebuyers Qualify for a Loan

I wanted to share some exciting news with you regarding the recent reduction in annual mortgage insurance premiums (MIP) for Federal Housing Administration (FHA) borrowers. This is great news for your clients who are first-time homebuyers or have limited credit history, as they may struggle to come up with the traditional 20% down payment typically required by lenders.

With the new #MIP rate of 0.5% (down from the previous rate of 0.85%), #fha borrowers can now enjoy lower monthly mortgage payments. This means that more people can qualify for a mortgage, and those who do can save money every month.

For those unfamiliar with MIP, it is a type of insurance that borrowers must pay to protect lenders in case of default. This insurance is required for all FHA loans, and it's usually paid monthly along with the mortgage payment. The amount of MIP depends on the size of the down payment and the loan term.

Assuming a 3.5% down payment, a borrower with a $900,000 FHA loan would have previously paid an annual MIP of approximately $7,650 ($637.50 per month) at the previous rate of 0.85%. With the new MIP rate of 0.5%, the same borrower would only pay $4,500 per year ($375 per month) for MIP. This represents a savings of $3,150 per year or $262.50 per month.

Over the life of a 30-year loan, the total savings from the reduced MIP rate would add up to $94,500. This is a significant amount of money and can make a big difference for first-time homebuyers or those with limited credit history who may be struggling to save for a large down payment.

With the lower MIP rate, FHA loans become an even more attractive option for those who want to buy a home with a smaller down payment. This can help more people achieve their dream of homeownership and provide greater access to affordable housing options.

It's important to note that FHA loans are not just for first-time homebuyers or those with limited credit history. They are available to anyone who meets the eligibility requirements and wants to buy a home. However, the reduced MIP rate can make these loans an especially appealing option for those who may be struggling to come up with a larger down payment or who want to keep their monthly payments as low as possible.

If you have clients who are considering buying a home and want to explore their options, now is a great time to reach out and learn more about how the recent reduction in FHA's annual MIP rate can benefit them. Encourage them to contact us today to discuss their options and determine if an FHA loan is right for them. By taking action now, they can potentially save thousands of dollars over the life of their loan and move one step closer to achieving their dream of homeownership.

County Single Unit Loan Limit

Yuba County $488,750

Yolo County $763,600

Ventura County $948,750

Tuolumne County $472,030

Tulare County $472,030

Trinity County $472,030

Tehama County $472,030

Sutter County $488,750

Stanislaus County $517,500

Sonoma County $861,350

Solano County $685,400

Siskiyou County $472,030

Sierra County $472,030

Shasta County $472,030

Santa Cruz County $1,089,300

Santa Clara County $1,089,300

Santa Barbara County $805,000

San Mateo County $1,089,300

San Luis Obispo County $911,950

San Joaquin County $656,650

San Francisco County $1,089,300

San Diego County $977,500

San Bernardino County $644,000

San Benito County $1,089,300

Sacramento County $763,600

Riverside County $644,000

Plumas County $472,030

Placer County $763,600

Orange County $1,089,300

Nevada County $644,000

Napa County $1,017,750

Monterey County $915,400

Mono County $693,450

Modoc County $472,030

Merced County $472,030

Mendocino County $546,250

Mariposa County $472,030

Marin County $1,089,300

Madera County $472,030

Los Angeles County $1,089,300

Lassen County $472,030

Lake County $472,030

Kings County $472,030

Kern County $472,030

Inyo County $508,300

Imperial County $472,030

Humboldt County $472,030

Glenn County $472,030

Fresno County $472,030

El Dorado County $763,600

Del Norte County $472,030

Contra Costa County $1,089,300

Colusa County $472,030

Calaveras County $472,030

Butte County $472,030

Amador County $472,030

Alpine County $497,950

Alameda County $1,089,300

Thank you for your time, and please don't hesitate to reach out if you have any questions.