If you would like to buy a home but saving up for a large down payment isn’t an option, you may want to consider obtaining a mortgage backed by the Federal Housing Administration (FHA). If you already have an FHA loan and you haven’t refinanced in a while, you may be able to reduce your mortgage insurance premiums by refinancing.
Benefits of FHA Loans
FHA loans offer down payments as low as 3.5%. Also, it is generally easier for buyers to qualify for an FHA loan than for a conventional mortgage. The minimum FICO score for an FHA loan is 580, which is lower than most conventional loan requirements.
More Affordable Than Ever
The FHA generally requires payment of mortgage insurance premiums when borrowers make smaller down payments. In 2015, mortgage insurance premiums were significantly reduced. According to the FHA, that translates to a savings of hundreds of dollars a year on average.
Who is Eligible for Reduced Mortgage Insurance Premiums?
If you already have an FHA loan, your mortgage insurance premiums are not reduced automatically. Those eligible for reduced mortgage insurance include:
- New homebuyers who choose an FHA loan instead of getting a conventional mortgage
- Homeowners with a current FHA loan who refinance with a new FHA loan
Given that interest rates are still relatively low, now is a great time to evaluate FHA refinancing options
What is the Next Step?
If you want to take advantage of lower mortgage insurance premiums, your first step is to contact an FHA-approved lender. Freedom Mortgage is an FHA-approved lender with years of experience providing mortgages to customers nationwide. Visit www.FreedomMortgage.com for more information.