As expected President Trump put the brakes on the FHA’s planned mortgage insurance premium reductions.
Even if the reduction has been approved – or it some pro-housing lobbies get it reinstated – it won’t help local buyers as much as the the $446 a year national average projected by the agency.
An analysis of how much the proposed cut would save local buyers by ATTOM Data Solutions show the average FHA buyer in Washington County would save $335 a year while the average Sullivan County buyer would save $290 a year.
The analysis also compares the percentage of wages to makes to make house payments before the reduction and after the reduction.
In Washington County, it was 29.5% before the reduction and 28.6% after.
In Sullivan, it was 20.8% before the reduction and 20.15 after.
For buyers who were looking at a FHA loan and who have a down payment and good credit now is the time to shop for a new lender. They’ll probably end up paying a little more interest since the FHA rates are lower than convention loans.
Buyers who have a credit problem – and some first-time buyers – are probably in the position of going back to square one and going the credit repair route and trying to save enough for a bigger down payment.
“The last FHA premium cut two years ago, helped to trigger a relatively short-term jump in home sales to FHA buyers, who are typically first-time homebuyers without much saved up for a down payment,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Prices of homes backed by FHA loans also accelerated higher in the wake of that last premium cut, although that premium cut occurred concurrently with a drop in mortgage rates, a scenario that is less likely this time around.”
But according to multiple sources, the FHA premium cut, which is scheduled to go into effect on January 27, will be delayed at best by the incoming administration.