Did you know the premium reduction on Federal Housing Administration (FHA)-backed mortgages will take effect Monday, Jan. 26?
FHA secures loans with down payments as low as 3.5 percent, and will cut the annual premiums charged to borrowers by half of a percent to help make homeownership more affordable.
This action is projected to save more than 2 million FHA homeowners an average of $900 a year. The change also is expected to spur 250,000 new homebuyers to purchase their first home over the next three years.
Borrowers should know there are restrictions. Fannie requires that at least one co-borrower be a first-time buyer.On loans where the borrower is putting down less than 10 percent, sellers may not pay closing costs totaling more than 3 percent of the purchase price.