Mortgage Insurance Rates Take a Big Dip
This could be your year. Thanks to a number of real estate trends—think slowing home prices and smaller down payments—experts have already been predicting that 2015 will be full of opportunities for first-time homeowners.
Now, a new White House announcement brings even more good news for potential buyers. The Federal Housing Administration—which typically provides mortgages to lower- and middle-income Americans—will slash the premiums on mortgage insurance from 1.35% of a loan’s value to just 0.85%.
Translation: The average first-time buyer (and existing homeowners who choose to refinance) could save $900 on their annual mortgage payment.
The White House noted in a press release that the change should make home buying affordable for many Americans who were previously stuck on the sidelines: “Too many creditworthy families who can afford—and want to purchase—a home are shut out of homeownership opportunities due to today’s tight lending market.”
In fact, government officials now anticipate that the slashing in premiums could entice up to 250,000 people to purchase a home for the first time over the next three years.
Next up: making mortgages more accessible. According to the press release, the White House will also take steps to help the FHA cut red tape and more clearly define what regulators expect of lenders.
If you’re aiming to purchase real estate this year—but aren’t sure what your finances can handle—check out this guide to knowing how much home you can afford.