The Department of Housing and Urban Development recently announced that the FHA mortgage insurance premium cut has been put on hold for the time being. However, many potential homebuyers do not know what this indefinite suspension means for their mortgage or their financial well-being down the road. Whether you’re on the market or are going through the process of buying a home, here are the details on what this change may mean for you.
About The FHA Mortgage Insurance Premium Cut
Julian Castro of Housing and Urban Development recently announced a cut to mortgage insurance premiums for homeowners, but this cut has been halted under the new administration. While this cut was meant to make home ownership a little more accessible for many Americans and was estimated to have saved approximately $500.00 per year, it was also stated that it was not a significant enough cut to make a difference for most interested homeowners.
What This Means For Potential Homeowners
While the FHA Mortgage Insurance Premium cut would have provided a little bit of savings for every homeowner, the amount for the average homeowner would not necessarily be enough to stimulate investment on the real estate market. For homebuyers who are purchasing a more expensive home, however, the savings at the end of the year can add up to quite a lot more. The suspension of this cut may not stop people from investing in a home if they’re prepared for the costs, but it may adversely impact the market for more expensive real estate properties.
What This Means For The 2017 Mortgage Market
The cost savings involved in this suspension may not be very significant for the homeowner, but with the prediction of higher interest rates in the short term, this could force those on the fence to invest in a home or hold off altogether. While loans from the FHA are good for those with lower credit scores and little savings for a down payment, with this suspension and higher interest rates, it’s possible that a slow-down in the market may occur over the next few months.
The suspension of the FHA’S mortgage insurance premium cut may have an adverse impact on the savings of homeowners, but the small amount of savings may not impact those who are looking to buy right away. If you’re currently on the market for a home, you may want to contact one of our mortgage professionals for more information.