Last week’s economic news was dominated by labor reports and FHA’s announcement that it will lower its mortgage insurance premiums in an effort to make homes more affordable for first-time and moderate income home buyers. Mortgage rates fell last week as employment reports showed strengthening job markets. The details:
FHA Lowers Mortgage Insurance Premiums
HUD, the agency that oversees FHA, announced Thursday that it will lower annual mortgage insurance premiums by0.50 percent. The change is expected to become effective toward the end of January; HUD stated in its press release that a Mortgagee Letter outlining the changes will be issued shortly.
FHA borrowers pay for FHA mortgage insurance in two steps; an upfront mortgage insurance premium is charged at loan closing, and also pay an annual mortgage insurance premium that is pro-rated monthly and added to mortgage payments.
FHA’s annual premiums increased five times since 2010 and rose from a…
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