Increased Affordability Intended To Drive New Buyers To The Market
As the housing market has continued to strengthen with 2014 putting another year of growth behind us, the Federal Housing Administration (FHA) has continued to work to implement changes that will welcome first-time homebuyers to the real estate market. One such effort came with the announcement that the FHA would be reducing the premiums required for mortgage insurance on loans they back by .5 percent.
This change is expected to save new homebuyers an average of $900 a year on their premiums. Experts predict the increased affordability this yields will drive upwards of 250,000 first-time homebuyers to purchase a home before the end of 2018. As approximately 800,000 families use an FHA-backed loan each year, this move is forecasted to significantly impact the housing industry.
This change will go into affect before the beginning of February, and borrowers who want to take advantage of this change only need to have a case number assigned on or after January 26th, 2015 to secure these reduced premiums. If you have a case number with a date prior to the 26th and your loan has not yet closed, the FHA will allow your lender to cancel your case number and create a new case number dated on or after the 26th.
This change is only applicable to loans with a term of longer than 15 years. If you were planning to secure a mortgage with a 15-year term or less, the mortgage insurance premiums on your loan will be unchanged.
Are you confused about how the changing face of the real estate market affects you? Have you been looking for an expert to guide your path to maximal savings on your dream home? If so, contact The Barr Team. Located in Irvine, we are dedicated to creating the ideal home buying or home selling experience for you in Southern California. Do not wait to get the guidance you deserve; call us today!