FHA Mortgages May Come With Reduced Mortgage Insurance Premiums

FHA mortgages are extremely valuable for many first-time homebuyers, but there is one notable downside: the requirement of paying annual mortgage insurance. New changes to FHA mortgages may reduce these costs.

How Will FHA Mortgages Reduce Mortgage Insurance Premiums?

Today, homeowners interested in pursuing an FHA mortgage and putting less than 20 percent down on their mortgage need to pay an additional charge called mortgage insurance, which is very similar to the private mortgage insurance charged by other loans. This mortgage insurance premium can be substantial and price homeowners out of the homes that they desire. 

A reduction in mortgage insurance premiums will bring these premiums down to a more reasonable level and allow FHA mortgage borrowers to afford more expensive homes. However, waiting for this mortgage insurance premium deduction may not be necessary for potential borrowers; many borrowers can instead choose to save up a 5 percent down payment and apply for a more conventional loan.

For more information about FHA mortgages and other types of mortgage product contact us now at Avis Lending. We are happy to help you get the financing you need for the home of your dreams!

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