FHA Mortgage Insurance Premium Rate Cut by Half a Percent. Demand Increases.
Applications for government backed loans increased dramatically after rates for Insurance Premiums are cut by half a percent. Michigan could see a big spike in mortgage applications and home buying as a result. The FHA (Federal Housing Administration) is lowering the fees to guarantee mortgages to just .85%. The FHA estimates that nearly 2 million borrowers could save around $900 a year over the next three years but you would need to refinance your home if you are not purchasing one.
The rates FHA charges have actually increased since 2011 to help cover losses on defaulting home owners after housing bubble. So this lower rate will allow more people to obtain a mortgage.
There is an upfront fee on the FHA mortgage insurance of 1.75% that will not be changed for home buyers.
According to the Mortgage Bankers Association, mortgage applications jumped 1.3% after the rate cut on insurance premiums. A huge part of this increase is due to the fact that homeowners are refinancing their current homes…Because applications to actually purchase a home fell about 2%. Likely due to the winter months when home buying is typically slower, especially in colder states like Michigan. According to the FHA, 250,000 first time buyers will apply more a mortgages after this cut in insurance premiums.
Even though applications for new purchases we lower, overall, they are up from just last year, showing increased improvement in the overall economy, employment, and historically low interest rates. Michigan, especially Kent County, has seen unemployment rates drop to some of the lowest in the Country. So add all of this in with falling Interest Rates and you have your reason to start the home buying process. You can actually get a lot more for your money now and is a great time to buy a home in Michigan.
And if that wasn’t enough reason, ListTrue.com has a Buyer Rebate of up to 1% of the purchase price.
For an example: on a $250,000 house the rebate would be right around $1000.00
Contact ListTrue.com for more details if you are buying a home in Grand Rapids, Rockford, Lansing, Grand Haven, Holland, Hudsonville, Muskegon, and Kalamazoo .
Grand Rapids, MI: 616.957.0500
Lansing, MI: 517-283-6200