$372 is the average monthly savings that my clients who have closed on their refi’s so far in March. With higher appraised values, thanks to the hot real estate market driving up home prices, many clients are also eliminating mortgage insurance with their refi.
HUD recently reduced annual mortgage insurance premiums for FHA 30 year fixed rate mortgages by 50 basis points. The annual mortgage insurance premium is part of the monthly mortgage payment and 50 basis is a dramatic reduction. If you have a $400,000 loan amount, this is a monthly savings of $166.67 (400,000 x 0.50% divided by 12 months).
Today HUD issued Mortgagee Letter 2015-01 officially reducing FHA mortgage insurance effective on case numbers issued on or after January 26, 2015. HUD is also allowing existing case numbers (with the current higher mortgage insurance) to be cancelled as long as they were ordered within 30 days from today.
From Bloomberg News:
As part of an effort to expand homeownership among entry-level buyers, President Barack Obama will announce a cut in Federal Housing Administration mortgage-insurance premiums during a speech in Phoenix tomorrow, according to three people with direct knowledge of his plans.
The annual fees the agency charges to guarantee mortgages will be cut by 0.5 percentage points, said two of the people, who asked not to be identified because the White House hasn’t yet made the announcement.
FHA’s HAWK (Homeowners Armed with Knowledge) program, which was designed to help home buyers receive reduced mortgage insurance premiums, has been delayed for at least one year as the program was excluded from the 2015 budget.
FHA loan limits for 2015 are the same as 2014 with exception to King County, Snohomish County and Pierce County, which were all increased.
The 2014 FHA loan limits for Washington state are determined by county. Here is a list in alphabetical order by county:
HUD just released the loan limits for 2015. All Washington state counties will have the same FHA loan limits as 2014 with exception to King County, Snohomish County and Pierce County. The tri-county area has higher loan limits that mirror 2015 conforming loan limits.
2015 Conforming Loan Limits for King, Snohomish and Pierce Counties:
- One Unit: $517,500 (up from $506,000)
- Two Unit: $662,500 (up from $647,750)
- Three Unit: $800,800 (up from $783,000)
- Four Unit: $995,200 (up from $973,100)
I will do a follow up post with a complete list of all counties soon!
UPDATE December 15, 2014: Here is a complete list of the FHA 2015 loan limits of all Washington state counties.
EDITORS NOTE 2/3/2015: Since writing this post, HUD has reduced mortgage insurance premiums (yay!) and loan limits have changed. Part of the fun of writing (and reading) a mortgage blog is that guidelines and programs change constantly. Reader beware.
When Washington state home buyers and home owners request a mortgage rate quote from me, they have many options, including FHA or conventional financing. Over recent years, conventional financing has become a more popular mortgage than FHA, despite FHA’s lower down payment requirements.
What’s not so hot about FHA?