Lower Your Mortgage Insurance Fees through an FHA Refinance
There is good news for homeowners and prospective buyers struggling with high fees for mortgage insurance! On Wednesday, January 7th, President Obama announced that the Federal Housing Administration (FHA) will drop annual insurance premiums on new mortgages from 1.35% to 0.85%. Note the word new here. If you are applying for a mortgage for the first time, you are perfectly positioned to take advantage of these new lower mortgage insurance fees. But if you are currently in an FHA mortgage loan, you will need to refinance to take advantage of the reduced fee structure. No matter what your situation, Global Mortgage is here to help. Call us today at (619) 692-3630.
How Much Can You Save with FHA Refinancing?
According to the Obama administration, the new rate should save most homeowners around $900 each year. To get more specific, let’s say for example that you have a $200,000, 30-year fixed home loan with less than 5% down. In a year, the change in fees would translate to $818 in savings. Multiply that across a decade, and you would save $7,421.
What Will the New FHA Mortgage Rates Mean for San Diego Homeowners?
As a San Diego homeowner, you could find yourself saving even more money. While this is a beautiful city to live in, it is not without its economic drawbacks. Here, homeowners struggle with some of the most expensive mortgages in the country. In fact, a new study published in December of 2014 by HSH, the largest publisher of mortgage loan information, ranks San Diego as the second most expensive metro city in California and the U.S. overall. Insurance fees here are higher as well. If you refinance with an FHA mortgage loan under the new rules in San Diego, you could save around $2,000 a year. Some homeowners may save even more than that.
Why the change? The White House sums it up nicely with this statement: “The Administration will not tolerate a return to shoddy underwriting or unsustainable mortgage lending, but believes there are too many middle-class families with good credit by historical standards who remain shut out of today’s tight market and deserve a chance to buy their own home.”
Today’s reduced fees are still higher than historical rates, but should do a lot to help creditworthy buyers to finally afford the homes that they dream of owning. Just how many middle-class families is the White House talking about in California? According to the National Association of Realtors, tens of thousands of borrowers in the state were unable to buy a home last year because they could not afford the 1.35% premiums.
Act Now to Secure Your New FHA Mortgage Rate
If you were one of those prospective buyers last year who could not pay the price for a new home in San Diego, the time to act is now. With the premiums slashed to 0.85%, you may finally be able to afford the home you have always wanted. If you are already in an FHA mortgage loan, your mortgage insurance will not go down with your existing loan. You will have to refinance using either an FHA Streamline or traditional FHA refinance. No matter what your situation is, we are here to help you afford your San Diego dream home. If you’re ready to start saving money now, give Global Mortgage a call at (619) 692-3630.