The rate cut would have saved $540 a year for the typical FHA borrower in Palm Beach County. But, with memories of the mortgage meltdown still fresh, Congressional Republicans worried that the move would shift risk from private borrowers onto taxpayers.
Because FHA loans are easy to qualify for, they’ve become a staple for first-time buyers. FHA loans require down payments of only 3.5 percent (compared to 20 percent for the standard mortgage), and they’re offered to borrowers with credit scores as low as 580 (well below the 740 level required for most Fannie Mae and Freddie Mac loans).
The downside? Borrowers must pay hefty premiums for mortgage insurance, coverage that protects the lender in the event of default. Hence HUD’s announcement earlier this month that it would shave 0.25 percent from mortgage insurance premiums starting Jan. 27.
According toan analysis by ATTOM Data Solutions, the typical FHA borrower in Palm Beach County has a loan amount of $216,000. The 0.25-point cut would have saved that borrower $540 a year.
Because of the high mortgage insurance costs, FHA borrowers typically aim to boost their credit scores and build enough equity to refinance into a less expensive loan.
Author:Victor DeFrisco Phone: 561-951-3759 Dated: January 31st 2017 Views: 108 About Victor: ...
View our latest blog posts in your RSS reader. Click here to access.
We are a full service real estate brokerage with over 100 agents to serve you. Let us be your real estate resource. Regardless whether you need to buy or sell now, or sometime in the future, let us help you. We are no pressure and will always try and help. Contact us at 561-792-3948 now.
"Margarita Zhemukhova very quickly found us the property we were looking for at a price we could afford. In working with her we found her to be always available to meet, very prompt in returning e-mails and phone calls (within minutes), pro-active in altering us to the next steps in closing and a pleasure to work with. I would definitely use her again and recommend her to anyone needing real estate services.