HUD announced last week that they were making homeownership more affordable by reducing the monthly mortgage insurance premiums on FHA loans effective in mid-March. The last time these mortgage insurance premiums changed was back in 2015. These new changes will, on average, reduce the homeownership cost by $850 annually, making this a real cost savings for homebuyers.
There were two changes of note:
For loan amounts less than or equal to $726,200, the premium went down 30 to 35 basis points (percentage of the loan amount) – and is determined by loan-to-value.
For loan amounts greater than $726,200 (multi-unit financing), the premium went down 10-15 basis points and again is determined by loan-to-value.
So what does this mean for you?
Consumers will be reading headlines and asking, “How does this impact me?” Being aware and informed shows you are the real estate expert. Your Key Mortgage loan officer can take it from there to walk them through the impact and options available to them.
Payment conscious buyers now may have more room to go up in price or unlock markets that were not available to them before, which is a great reason to circle back with them and engage.
You may see more FHA offers on listings. With the Loan Level Pricing Adjustments coming to conventional loans soon (remember our previous Keynote article) this may drive more buyers to FHA – so dispelling myths on the “old FHA ways” may be needed.
Anytime a headline grabber like this comes out it provides us all a great opportunity to connect with our sphere and bring value. Know your partner at Key Mortgage is with you to support those efforts and bring more buyers (and sellers) to the table. Reach out to a Key Mortgage loan officer today to see how you can take advantage of these changes.