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A special thanks to Bridget Olson of Century 21 Real Estate for being in the video. Call her at 402.218.6021 or email her at wcoastproperties@aol.com.
Here’s one more move Uncle Sam is making while under President Obama’s umbrella that will lighten the heavy load shouldered by many homeowners facing foreclosures in the wake of the nation’s recent foreclosure crisis. With the idea that anything the government can do to help homeowners keep their homes despite the industry’s recent ups and downs, the administration’s announcement comes with much relief to both the mortgage industry as well as homeowners that have the potential of losing their properties.
The plan, already in place and being implemented by many mortgage professionals across the country, will serve to cut insurance fees paid by the mortgage owner for FHA-backed loans. At a time when every dollar counts during this weak economy, this comes as a welcome concession for many families and homeowners struggling to make ends meet. The government hopes that with this new plan, mortgage holders are compelled to refinance their loans and avail lower interest rates while benefitting from a lower cost of insurance on the mortgage.
Lower Fees Amount to Big Savings for Homeowners
Under the plan, most FHA-insured mortgages can be refinanced at half the current fee; combating future expected rising mortgage insurance premiums in the years to come. Further, the premium charged at the time an FHA loan is established will also be reduced. The administration pegs this as hopefully being the motivation millions of homeowners will need to initiate refinance applications on their current higher-interest rate mortgages.
Currently, Private Mortgage Insurance fees amount to the equivalent of 1.15% of mortgage holders’ balance each year. The new plan now cuts those same fees to just 0.55%; almost half the fees homeowners are currently paying. Not only that, loan insurance premiums will also be reduced ten times as much as the current amount paid up front by FHA buyers. This not only translates to significant savings at the time of refinance but it also eases the burden on homeowners on a month-to-month basis, allowing them to tackle more of the loan’s principal and interest.
How Does a Homeowner Qualify for This Money-Saving Program?
The first thing you should do is to contact your loan officer. The program is designed to assist as many as three million homeowners, mostly first-time homeowners or those that qualify as low-income buyers. To find out whether you fit the criteria, your loan officer will assess your home purchase and determine eligibility.
This program provides the additional ease of only requiring 3.5% down on the purchase and the requirement to prove employment is waived. Underwater or distressed property mortgages are also eligible. Your loan officer will be able to determine which type of program best suits you, in case there is another federal housing program that better suits your needs.
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It is too soon to see whether this move to ease some of the financial burdens of struggling homeowners will have a significant impact on the housing industry as a whole, however with overall lower interest rates obtained and reduced up-front insurance fees there is much to gain. Industry experts also say that this plan will help boost job growth, which in turn will hopefully stimulate the economy.
To find out if you qualify to save hundreds on your mortgage each year and each month, contact your mortgage officer today!
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