By the Kent Redding Group
AUSTIN, TX. – If you’re thinking about buying a home for the first time, right now may be the most affordable time in recent memory to buy a home thanks to one final act from the Obama Administration who announced that they would be slashing the annual insurance premium for FHA loans.
25% Cut by January 27th
Come January 27th the annual insurance premium will be slashed by 25 basis points to a level seen just before the recent collapse of the housing market. This cut will affect people who have FHA loans with balances that are $625,000 or less and homeowners with loans over $625,500 will see an awesome reduction in their premiums of 45 basis points.
The National Association of Realtors (NAR) and some mortgage groups, such as the nonbank association, the Community Home Lenders Association (CHLA), have for months called on the agency to lower the premium to its precrisis level of 55 basis points, noting that FHA originations were boosted significantly by the cut in 2015.
“Actual FHA loan volume and a recent Federal Reserve Report showed that the prior FHA premium cut had a significant impact in creating new home purchase opportunities for borrowers — and we expect this new cut will do more of the same,” CHLA President Scott Olson said.
Current Mortgage Interest Rates
Besides the FHA insurance premium cuts, mortgage interest rates are still low at 4.2% for a 30-year fixed rate mortgage loan. The BIG question many industry analysts want to know is for how long will they remain low since most people feel that interest rates will only continue climbing once President Elect Donald Trump takes office on January 20th, 2016.
To take advantage of low mortgage interest rates buyers should get pre-approved for mortgage loans now since a mortgage loan pre-approval can last between 60 and 90 days.
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