A reduction in the mortgage premium insurance means many more first time Pueblo Home buyers should qualify for home loans.
On Jan. 8, 2015, President Barack Obama announced along with Chris Polychron, President of the National Association of REALTORS® (NAR) that the Federal Housing Administration (FHA) will reduce the FHA annual mortgage premium insurance (MPI) by 50 basis points. NAR estimates that the reduction in the annual MPI will be reduced from 1.35% to 0.85%.
An FHA loan is a mortgage that is insured by the Federal Housing Authority, a government agency within the U.S. Department of Housing and Urban Development (HUD). FHA does not lend money or issue credit, it only insures the loan that you would receive from a mortgage lender.
Basically what this means is that when a loan is insured through the FHA you pay an additional fee with every payment, the mortgage premium insurance (MPI), every month along with the principal and interest on the loan. The reduction in premiums on mortgages could save an average borrower $1,000 a year on a $200,000 loan, says Mark Zandi, chief economist at Moody’s Analytics.
This is good news for the economy, NAR estimates that nearly 400,000 additional borrowers will now be able to afford and qualify for homes, whereas in the past they may not have qualified for a loan.
The Benefits to Pueblo First Time Home Buyers
Along with additional down payment assistant programs available to first time Pueblo Home Buyers and the reduction in the monthly MPI fee, it may be possible to obtain a loan for a home in Pueblo County for as little as $1,000 down*.
FHA mortgages offer a wide range of benefits and consumer protection that conventional loans may not have. Some of the most attractive things about an FHA mortgages are the low down payment and more lenient credit qualifications. FHA loans are quite simply some of the easiest loans to qualify for.
If you are a first time home buyer here in Pueblo County, give me a call and I’ll explain the entire process to you and help you get started on your road to home ownership. For more information see my Pueblo CO First Time Home Buyers Information