FHA Changes for 2016

FHA Changes for 2016


The Federal Housing Administration (FHA) announced the reduction of it's annual Mortgage Insurance Premium (MIP) rates.

Effective on or after January 26, 2015 FHA will reduce the premium from 1.35% to .85% a reduction of .5%.

On a $100,000.00 loan this will mean a reduction of $40.21 per month.

On a $200,000.00 loan this will mean a reduction of $80.42 per month.

Combined with interest rates that are again at an all time low plus the reduction of MIP rates means that it is a great time to buy a home or refinance your mortgage.

FHA Changes for 2016

Congress created the Federal Housing Administration in 1934. FHA became a part of the Department of Housing and Urban Development's Office of Housing (HUD) in 1965.

The Federal Housing Administration, generally known as FHA, provides mortgage insurance on loans made by FHA approved lenders throughout the United States. FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowner's default. Loans must meet certain requirements established by FHA to qualify for insurance.

After the credit crisis of 2007-2008 qualifying for a mortgage became a lot harder. If not for FHA many borrowers would not qualify for a mortgage. What makes FHA different than a conventional loan is the FHA will approve you and give a better interest rate with a lower down payment even if you have a low credit score.

FHA loans require two mortgage insurance premiums. The upfront one, which is 1.75% of the loan amount and must be paid when you get the loan. It can be financed and may be wrapped into your loan payments. Starting January 26, 2015 the annual premium is .85% of the loan amount. It is paid in groups of 1/12th of the total loan amount and are included in your monthly mortgage payments.

When you compare FHA vs. conventional loans FHA loans win the down payment race hands down. FHA loans only require a minimum down payment of 3.5 percent of the purchase price versus a conventional loan requiring between 5 to 20 percent down payment.

To be eligible for an FHA loan your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (31% ratio). Your credit background will be fairly considered. At least a 500 credit score is required to obtain an FHA approval. You must also have enough income to pay your housing costs plus all additional monthly debt (50% ratio). These ratios can be exceeded somewhat with compensating factors. FHA 2016 changes.

FHA loans are continuing to support the nation's housing market recovery.


FHA Changes for 2016

Apply Now!

Call us 888.958.5382


Mortgage World Home Loans is an online mortgage company specializing in FHA loans for first time home buyers. To buy a house with 3.5% down payment and a minimum credit score of 580 using an FHA loan, apply online.

We recognize the importance to you of keeping your information secure and confidential. We will not sell or share your personal information.


We look forward to working with you.

Apply Now

Call us 888-958-5382


www.MORTGAGE-WORLD.com LLC is an online mortgage company specializing in FHA loans for first time home buyers.


We look forward to working with you.

LOGO

fha changes for 2016, fha changes for 2016

Image 12

Apply Now!

Call 800.516.9166

Email Us!


Recent Articles

  1. Minimum Credit Score FHA Loan 2024 FL

    Feb 26, 24 08:56 AM

    blog.png
    Minimum credit score FHA loan 2024. Minimum credit score is 500. Credit score above 580 require a 3.5% down payment. Credit scores below 580 10% down payment.

    Read More

  2. NJ Mortgage, Mortgage Rates NJ, Mortgage Refinance NJ, NJ Home Buyer

    Feb 22, 24 06:39 PM

    Blog 1
    NJ Mortgage, Mortgage Rates NJ, Refinance Mortgage NJ, New Jersey Mortgage Rates, NJ First Time Home Buyer Mortgage, NJ Cash Out Refinance Mortgage.

    Read More

  3. NJ Refinance Closing Cost

    Feb 22, 24 06:37 PM

    Blog 1
    NJ Refinance Closing Cost, Lowest Refinance Closing Cost in New Jersey, Refinance Closing Cost in NJ, Mortgage Closing Cost, Refinance Closing Cost, NJ

    Read More


LOGO

New Jersey Location

Call Now, Our Staff is Available!

800.516.9166

Z1.png

Minimum Credit Score Needed

to Buy a Home or Refinance


Apply Now!

Call 888.958.5382

E-mail Us!


FHA loans

Requires a minimum credit score of 500 to buy a home or refinance

FHA minimum

credit score 500

VA loans

Requires a minimum credit score of 500 to buy a home or refinance

VA minimum

credit score 500

Fannie Mae

Requires a minimum credit score of 620 to buy a home or refinance

Fannie Mae minimum

credit score 620

Freddie Mac

Requires a minimum credit score of 620 to buy a home or refinance

Freddie Mac minimum

credit score 620


Call Now, Our Staff is Available

888-958-5382

Apply Now!