Lower Mortgage Payments for Los Angeles Buyers/Owners as FHA lowers Insurance premiums

The Department of Housing and Urban Development recently announced changes to FHA loan premiums.

While upfront mortgage insurance premiums will remain at 175 basis points (1.75%), annual mortgage insurance premiums are seeing a decrease. Basis points will be dropping across the board. Depending on a few factors, your MIP could drop anywhere from 15 to 45 basis points.

Factors that affect this will include

  • whether your term is 30 years, or 15 years and less
  • whether your base loan amount is above or below $625,500
  • whether your loan to value ratio is above or below 95% for 30 year terms, 90% for 15 year and shorter terms with a base loan of less than $625,500, and 78% for 15 year and shorter terms for base loans over $625,500

The largest mortgage insurance premiums decreases will be for high base loans with high loan to value ratios and shorter terms. But even for a more minimal 15 basis point MIP reduction, a loan below $625,500 can see savings of over $1000 per year.

These changes will take effect on January 27th, 2017, so anyone with an FHA approved mortgage can look forward to some big savings in the new year!

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