Recently a very positive announcement was made in regard to FHA home loans, in that the annual mortgage insurance premiums would be reduced by .5% for certain new FHA loans. We recently covered this change in a previous article, but the major change is as follows.
If you take out a new FHA loan and put down a 5% or less than down payment, then previously you would have paid a 1.35% FHA mortgage insurance annual fee, added to each of your monthly payments. However, with the new changes, that number will drop to a .85% FHA mortgage insurance annual fee. In addition, if you put more than 5% down on a 30 year fixed FHA loan, the previous annual mortgage insurance fee on an FHA loan was 1.3% and will be dropping to .8% annually, split evenly into your monthly payments.
In addition, another positive change is on the horizon for the way FHA home loan payoffs work.
Beginning on January 21, 2015, for all new FHA home loans originated that date or later, if you are paying off an FHA home loan, the interest on the payoff, only has to include interest through the day the loan is paid off and not through the end of the month, as previously was the case.
This is a very positive development, because previously, if you were paying off an FHA home loan through taking out a new mortgage or selling your home, no matter what date you paid off the FHA loan, interest was charged until the end of the month the loan was paid off.
For example, if you paid off an FHA mortgage on the 5th day of a month, you had to pay interest until the final day of the month. This is no longer the case now with this new provision, as in the same example above, interest only needs to be collected through the day the loan is paid off.
This is very beneficial for homeowners refinancing an FHA home loan and sellers who are selling home with an FHA loan attached to it. However, remember that this applies only to new FHA loans, originated January 21, 2015 or later.
As always, we will keep you updated with any further changes. However, if you are looking to purchase a home or refinance your home, using an FHA mortgage, make sure to always seek out a licensed mortgage professional such as Strategic Mortgage.
For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Strategic Mortgage, LLC – AZBK#0909514 – NMLS#158804
Vasilios Bill Kamboukos – NMLS#160440 – Equal Housing Lender
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