Last week, the Obama administration announced that the premium that borrowers with an FHA-backed home loan must pay for mortgage insurance will be dropped to 0.85 percent from 1.35 percent by the end of this month. The move is estimated to save the average homebuyer $900 a year, as well as help save money for homeowners looking to refinance their mortgage.
That followed an announcement last month that Fannie Mae and Freddie Mac, which buy home loans from lenders and then package them as securities to be sold to investors, would be adopting new guidelines on down payments. Specifically, the change would enable some borrowers to buy a home with a down payment as low as 3 percent, down from a minimum of 5 percent.
Of course, FHA, Fannie Mae and Freddie Mac have their own definition of a qualified borrower, but banks often go beyond these standards, raising the threshold for what it takes to qualify for a home loan. If you or someone you know would like to take advantage of the great opportunities coming available to prospective home-buyers, please give us a call today.