New FHA Mortgage Insurance Premium Rates
The FHA mortgage program has been extremely successful. The program is more than solvent and that has allowed HUD to lower the monthly mortgage insurance premiums at a time when home affordability is stressed with higher mortgage interest rates. The previous rate was .85% a year on the total amount owed, payed monthly. So if you had a $300,000 FHA mortgage, your mortgage insurance rate would be $2,550 a year, and $212.50 a month. That’s if you made the typical 3.5% down payment which is the minimum requirement on FHA mortgages.
How Much Will the New FHA Mortgage Insurance Rates Save Me?
The new rate with 3.5% down on a 30 year mortgage is .55%. So that same mortgage would have a monthly mortgage insurance payment of $137.50 or $1,650 a year. That’s a monthly savings of $75. Anything helps in this market! When it comes to debt ratios that $75 savings could also give you $10,000 more in purchasing power.
The mortgage insurance is for the life of the loan unless you are doing 10% down or more. With 10% down or more the mortgage insurance will remain for 11 years. With 5% down or more the mortgage insurance rate drops modestly to .5%.
The upfront guarantee rate of 1.75% is not changing. This gets financed into your loan when purchasing or refinancing with the FHA mortgage program.
When are the new FHA mortgage insurance rates effective?
The new mortgage insurance rates are going into effect for our preferred lenders comes February 27th 2023! If you loan is already in process it will automatically update. We are looking forward to being able to provide our clients with additional savings!