The annual mortgage insurance premium (MIP) for FHA loans will decrease from 0.85% to 0.55%, a drop of 0.30 percentage points. Saving homebuyers an average of $800 in 2023.
First-time Homebuyers are still waffling on whether or not this is a good time to buy a home. In some cases, rates are still higher than pre-pandemic levels, and in some cities, the inventory is lower than ideal. Homeownership is a principal source of wealth, and this reduction can help buyers feel better about getting started.
MIP is the monthly insurance fee that borrowers with FHA loans pay in addition to monthly interest and principal payments on their mortgages. Lowering the premiums will expand homeownership opportunities by lowering mortgage payments for qualified FHA borrowers. This will provide tremendous relief from rising mortgage rates and home prices. This couldn’t come at a better time, as the Real Estate industry typically sees an increase in home shoppers in the Spring.
We genuinely think market conditions should not be the deciding factor for why you purchase a home.
Market experts are attempting to predict how far the Fed is willing to see real estate markets decline. Bankers are also very combative about where interest rates will need to go to quell inflation. Unpredictable housing trends can be a trap set by the media to influence your decision-making. Inflation is still something to watch in 2023, and we always aim to get our borrowers the best possible rate, but the truth is — we genuinely think market conditions should not be the deciding factor for why you invest in a home.
Instead, focus on your personal situation:
- Is this a good time for your family to move?
- Are you (and your co-borrower) feeling stable in your job?
- How is the health of your personal finances?