Mortgage Insurance Premiums Drop
Welcome to 2015! We will run our what to expect in 2015 in real estate column in the next week or so but big news on the national scene today as the Obama administration has issued a press release confirming that they will be dropping the Mortgage Insurance Premium by .5% in 2015! What does that mean for you? Nothing but good news!
The current MIP is 1.35% of your home purchase. For some buying at the max FHA limits in the $300ks, that means thousands of dollars a year towards your MIP which does you absolutely no good. A quick refresh on what MIP is; MIP is essentially an insurance premium you pay just in case you go into foreclosure so the bank can recoup some of your losses. Does nothing for you.
The drop in MIP down to .85% will save the average home buyer in 2015 $900/yr. That is HUGE. Not only will that be saving $75/month on average, but it will make affordability that much easier. Could only afford $200k before but you can't find anything you like in that price range? With the drop in MIP you should be able to bump your price range just enough to find that $215k home that you absolutely love!
This drop in MIP helps everyone and with the increases in FHA spending limits AND the new 3% down models, 2015 is shaping up to be a fantastic year for home buyers.
Have more questions about MIP, shoot us an email or ask us in the comments, we are happy to help!