FHA Loans are About to Get a Little More Affordable

We just received breaking news today about FHA loans: they are going to be a little more affordable. You can see the full announcement here.

The Newest FHA Loan Changes

In the past, any time you have a loan with less than 20% down, it means that you are going to need some form of mortgage insurance. FHA is a little more extreme – it doesn’t matter how much you put down, you still need to get mortgage insurance.

What they are doing now is reducing the factor that we use for FHA loans. The way this works is the percentage of the loan amount. It’s been .85% of the loan amount for years. Now, they are bringing it down to .55%, which is a pretty significant change.

To show an example with numbers: on a $500,000 loan it will save $1,500 per year (about $125 per month). That’s a big deal… it adds up! Depending on where you go, it could pay for the insurance.

FHA Loans are More Affordable

This change is worth talking about because it will help some people qualify. It’s also an offset to the currently high interest rates. We’ll take it!

So, this change is making FHA a little more affordable. This information is great to share with others because there are many options. While we use it for many first-time homebuyers or people with low credit, these loans are also available for people who aren’t buying their first homes.

This is going to be a great program, and we would love to help you find the ideal financing solutions. It’s an excellent piece of news to share since it will help homebuyers save money on their purchases. If you have questions or need additional information, then reach out to me any time. My team here at Franklin Loan Center is always here to help!