On January 9, 2017, the Department of Housing and Urban Development (HUD) announced that they were planning to lower the mortgage insurance premium on Federal Housing Administration (FHA) loans. However, on January 20, 2017, the  decision was reversed , thereby maintaining the current rates. FHA loans are often used by first-time homebuyers as well as those who wish to purchase a home with less than a 20% down payment.

Mortgage insurance programs exist in different forms on VA loans, FHA loans, USDA loans and conventional loans. When a homebuyer has less than a 20% down payment to buy a house, they will typically pay mortgage insurance. The purpose of this type of insurance is to protect the lender in the event of a default on the loan. If a loan defaults, the lender must foreclose and then resell the house, typically at a lower price than before. The insurance would then pay the lender for their loss on the loan.

HUD may reevaluate FHA mortgage insurance rates in the future, but until then, you can typically save money on mortgage insurance by increasing your credit score or making a larger down payment.

We offer a variety of loan programs. My specialty is working with homebuyers to help them determine the best loan structure, with or without mortgage insurance. We have options for homebuyers who have less than 20% to put down with a no mortgage insurance option. Call me today to talk through all of the possibilities and we will work together to find a great loan for the home you have always wanted.