Focus On Financing

MIP Reduction Makes FHA More Affordable

UPDATE: The reduction of MIP premium has been suspended indefinitely by the Trump administration. Click here to read more on this. 

The U.S. Department of Housing and Urban Development (HUD) recently announced a quarter-percent reduction in mortgage insurance premiums on certain FHA loans. According to HUD, homeowners may save $500 per year on mortgage insurance. The current MIP rate of .85% will drop to .60% for all loans originated on or after January 27, 2016.

FHA loans have benefits that can include small down payment requirements and, in some cases, easier qualification. Whether you purchase or refinance, the recent reduction may help by:

• Improving affordability
• Allowing access to higher loan amounts
• Offsetting the impact of recent increases in mortgage interest rates

Improve Affordability or lower your payment

For people buying a home this recent change can help increase their buying power by approximately $10,000 dollars.

For existing homeowners with FHA loans, you may Streamline Refinance to take advantage of this new MIP reduction.

Check out the MIP changes throughout the years

 Change date Monthly MI Upfront MIP
 April 2010 .55% 2.25%
October 2010 .90% 1.00%
April 2011 1.15% 1.00%
April 2012 1.25% 1.75%
April 2013 1.35% 1.75%
January 2015 .85% 1.75%
January 2017 .60% 1.75%
If you have questions about FHA loans, mortgage insurance or any other aspect of mortgage financing, I’ll be happy to help. Please call or send me an email at your convenience.

January 19, 2017 by · Leave a Comment

About Steve

Steve is an experienced Sr. Loan Officer & Mortgage Planner located in Rancho Cucamonga and serving the Inland Empire and surrounding areas. Steve prides himself at being transparent with all his clients using sophisticated tools and concepts to make sure the right program is chosen. Call Steve Chavarria at 951-662-3389.

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