Tuesday, January 20, 2015 / by Jen Koenig
As we've talked about before, the market is steadily improving, especially in the Madison area. Now, thanks to efforts made by the Federal Housing Administration and Fannie Mae, buying a home is becoming even more affordable, especially for first time and lower income buyers.
In early January, the FHA announced that they will be lowering the cost of mortgage insurance. Premiums will be decreased from 1.35% of a loan's value down to .85%. For the typical first time homebuyer, this equates to a savings of $900 annually. And the news is also good for anyone looking to refinance their home through an FHA loan; they will also see the same decrease in mortgage insurance payments.
Meanwhile, Fannie Mae & Freddie Mac have announced that they will be backing mortgages where the borrower puts as little as 3% down on the home purchase. Participants are required to meet minimum credit score requirements, offer proof of income and assets, and attend home ownership counseling. While at first glance this doesn't appear radically different than the 3.5% FHA loans that are available, the savings add up over time. According to the article below, taking advantage of the new Fannie Mae & Freddie Mac mortgages over the FHA loans can save you $30,000 over the life of the loan.
Have questions about financing? Not sure which loan to choose? Sign up for one of our free first time homebuyer consultations. Even if you've bought a home before and just need a refresher course, our agents will happily walk through the process with you and discuss your financing options. We're also happy to recommend lenders who we know can work with you to achieve your home buying dreams!
For more information about these new mortgage programs, check out these articles: