Finally, some good news for low- and middle-income buyers! The FHA just announced lower interest rates on purchase insurance, beginning March 20.
New case files created after that date will see a 30% discount in the insurance rate for their loans, dropping from from 0.85% to 0.55%. This could result in a savings of $800 per year.
For example, if you were to get a $300,000 loan with a 3.5% deposit at the current rate, your insurance premium would be ~$205 per month. Under the new rate, premiums drops to ~$132. While this signifies a nice savings, it also means that you may qualify for a bit more home, as this lowers your debt-to-income ratio.
FHA loans are government backed loans insured by the Federal Housing Administration. Buyers using this program can put as little as 3.5% down, making the program appealing to first-time, low-, and middle-income buyers. Find out more about the interest rate reduction by clicking here. Find out more about FHA loans here.
Are you interested in purchasing a home with an FHA loan? Reach out to a qualified real estate agent for more information.