Obama Reduces FHA Fees

Obama Reduces FHA FeesHow Fees For Federal Housing Administration-Backed Loans Are Changing

As 2015 began, it marked another year behind us since the economic downturn led to the Great Recession and crash of the housing market. Since then, the housing market has struggled to return to its former health. 2014 brought significant appreciations in the cost of homes for sale, signaling increasing health in the market but decreased consumer confidence since the downturn, stringent mortgage requirements, and a reduced inventory of for-sale homes have kept many would-be homebuyers out of the market.

To remedy that situation, President Obama announced that the fees paid by those who secure a loan backed by the Federal Housing Administration (FHA) would decrease in the coming year. The annual fees assessed by the FHA will drop from 1.35 percent to .85 percent. It may seem like a small decrease, but experts say it will save first-time homeowners nearly a thousand dollars a year on their mortgage payments.

Real estate economists say that this should create a boost in the housing market because it will make securing the mortgage necessary to become a first-time homebuyer more affordable. It also signals that the real estate market is improving, as the fees were raised to their current levels to protect the FHA after the housing market crashed. Their reversal indicates that those kinds of safeguards are no longer necessary, meaning increased health in the market.

Are you hoping to become a first-time homebuyer in 2015? For a guide on the changing face of the mortgage industry and how you can use the transformations to maximize the affordability of your mortgage, contact the home loan experts at Avis Lending. With locations in Irvine, California and Lahaina, Hawaii, we are here to meet all of your West Coast mortgage needs. To bring your home buying dreams to life this year, call us today!

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