Mortgage insurance is an insurance policy that protects the lender in case the buyer defaults on the loan. This policy is required on loans when a buyer makes less than a 20% down payment. FHA annual mortgage premiums are a part of the monthly mortgage payments along with principal, taxes, and interest
The Federal Housing Administration’s (FHA)annual mortgage insurance rate is currently 1.35%. However, guidelines put in place this will month will reduce these annual premiums to 0.85%. This reduction may cause a significant savings for FHA borrowers and are available for FHA loan case numbers assigned on or after January 26, 2015.
Bottom line, this rate change can cause a substantial savings for the homebuyer. On a $170,000 home, the savings would be approximately $800 per year. This can add up substantially over the life of the loan. For more information about this program and to get approved contact Shawn Daughtry at email@example.com or 803.665.5119. He will be able to help with the approval process and give more information on how to can own a new home with minimal down payment and no closing costs.