President Obama recently shared that the PMI premiums for FHA loans is changing by half a percent. This will truly help buyers currently in the market to purchase. In this article is helpful information on decreased FHA PMI premiums for MA loans.
Starting January 26, 2015
Decreased FHA PMI premiums for MA loans are effective on January 26, 2015. Any FHA case numbers requested on or after that date will benefit from the reduced rates. Case numbers are usually created when an application is submitted. For active case numbers, you might be able to cancel and generate a new one. There is a set procedure that must be followed by your lender to accomplish this. Regrettably, this is not an option for closed loans. Refinancing would be needed.
Decreased FHA PMI Premiums For MA Loans
Decreased FHA PMI premiums for MA loans are half a percent lower than previous PMI premiums. There are actually various PMI premiums based on the down payment amount. For loans with five percent down or more, the PMI charge was 1.3% and is now changed to 0.8%. For loans with less than 5% down, the previous PMI was 1.35%, compared to the new 0.85% rate.
Impact of the Decreased PMI Premiums
Recurring PMI is calculated by multiplying the loan value (not sales price) by the PMI, and then dividing by 12 (months). For a borrower putting 3.5% down, the PMI on a $200,000 mortgage changes from $225/month to $141.67/month, saving $83.33. On a larger mortgage of $400,000, the difference is $166.67 per month. With the decreased PMI premiums, that same home buyer pre-approved for $400,000 may be able to increase their loan amount to $420,000 instead. So, this PMI drop not only makes home ownership more affordable but will also help buyers to get into a more expensive property (if desired).
Help with FHA Loans in MA
Decreased FHA PMI premiums for MA loans is simply one of many changes that constantly take place in the mortgage industry. Your loan consultant ally to keep you up-to-date with important changes and assist you through the whole process. Contact Peter DaMore at Law Offices of Peter T. DaMore Jr. (781-229-7900, firstname.lastname@example.org) to be referred to a local loan officer.