Federal Housing Administration, known to be the government insurer of low down-payment home loans, has just reduced annual mortgage insurance premium by 25 basis points. FHA pointed out that the reduction in insurance premium was due to the improved financial condition of the FHA’s insurance fund and continue to make home-ownership less costly.
With the current hike in interest rate, this reduced annual MIP is expected to save home buyer an average of $500 this year which will help offsetting some of the costs of home-ownership and put them in the path to achieving the American Dream.
With FHA loans, borrowers can put as little as 3.5 percent down on a home. US of Housing and Urban Development (HUD) officials said the reduction is likely to lower the cost of housing for approximately 1 million households who are expected to purchase a home or refinance their mortgages using FHA-insured financing in the coming year.