The new FHA policy was announced not long ago, which will reduce annual mortgage insurance premiums or MIP on FHA Loans. This news was announced by President Obama and the National Association of REALTORS believes the annual MIP will see a reduction of 0.5% to 0.85%.
This reduction will help first-time borrowers and many other borrowers obtain home loans they would not be able to get any other way. This can help renters go from renting to buying and help others get into the home they really want.
Tips for Buying a Home Under this New Policy
As you start home shopping, it's important to understand what this new FHA policy may do for you. Here are a few tips to help you navigate the new policy.
Consider What you can Comfortably Afford
Before you start shopping for a home, you should consider what you can comfortably afford. It's important to understand this new policy may allow you to purchase a larger, more expensive home, but that doesn't mean you have to. It may be better to allow the policy to make the right home for you even more affordable instead of spending more.
Check with Preferred Lenders Again
If you have not checked back with lenders you are working with or wanted to work with since the policy has been issued, you should. They may be able to qualify you for a reduction, which could make it possible to get into a home or save money on the home you want to purchase.
Consider Refinancing is You Own a Home
Even if you're not buying, refinancing could help you get a lower rate and a reduction on your premium. You may be able to save money or even shorten your loan term because of this new FHA policy.
Since more people are looking for a new home because of this policy and other similar policies, now is the time to start looking. The longer you wait, the more competition you will run into and the higher home prices will go.
If you're not sure what Obama's new FHA policy means for you, check with your preferred lender or real estate agent for more information.Posted by Jolenta Averill on