Here’s how much Tri-Cities first-time buyers will benefit from FHA mortgage reform


By DON FENLEY

An analysis by RealtyTrac shows the recently announced FHA reduction in annual mortgage insurances premiums will amount to savings to first-time buyers in the Tri-Cities, but not the $900 a year touted in the program’s announcement.

The reduction of 50 basic points, from 1.35% to 0.85%, is part of an effort to make mortgages more affordable to families or individuals who meet the standards.

RealtyTrac’s county-level report shows the annual savings in the Tri-Cities would range from $290 a year to $627.

Data used in the analysis included:

  • The 2014 estimated median house income for counties.
  • The average loan amount with a 3.5% down payment.
  • Average monthly payment before the reform.
  • Average monthly payment after the reform.
  • Home affordability before the reform (based on the percentage of income needed to buy).
  • Home affordability after the reform (based on the percentage of income needed to buy).

A benchmark of 28% or less of the median income to buy a median price home was used in the analysis.

After the numbers were crunched the analysis shows a percent saving and annual savings in dollars.

Here’s how the annual savings look for the Tri-Cities:

  • Sullivan – $497.
  • Washington – $627.
  • Greene – $386.
  • Carter – $456.
  • Hawkins – $410.
  • Unicoi – $297.
  • Johnson – $290.

The study also includes a  heat map that shows where buyers will save the most and what markets would be most affordable to those making the local median income.

 

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