The plan announced by the White House earlier this year to reduce mortgage insurance premiums (MIP) for FHA loans just went into effect.
As of Monday, MIP payments for FHA loans dropped from 0.85% to 0.55% for borrowers with a base loan amount of $726,200 or less. For borrowers with loan amounts above $726,200, the new MIP is 0.75%, down from 1.05%. The mortgage insurance premium is the monthly fee that homeowners with FHA-insured mortgages pay to insure their mortgages.
Below are some examples of approximately how much FHA borrowers will save with the changes:
- A $300,000 mortgage will save $900 per year.
- A $400,000 mortgage will save $1,200 per year.
- A $500,000 mortgage will save $1,500 per year.
The Biden administration predicts that the change will lower costs for an estimated 850,000 homebuyers in 2023.
This article originally published at https://dc.urbanturf.com/articles/blog/what_the_new_fha_mortgage_fee_cut_will_mean_for_homebuyers/20798.
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