FHA rates and MIP are lower in 2015

This month the FHA will be reducing mortgage insurance premiums for the first time since 2001. After having to borrow $1.7 billion from the U.S. Treasury last year, things have improved dramatically over the past year. The FHA’s Mutual Mortgage Insurance fund now has a balance of over $7.8 billion.

The large reserve balance was helped by improved loan performance and a rise in home values. The improving job market and economy have helped the housing market, and rates still remain low. At the end of the month, the FHA will reduce the annual MIP by 0.50 percent for 30-year loans.

For those who took out an FHA loan while MIP rates were at all-time highs, now is a great time to refinance. If you currently have an FHA loan and have at least 3 percent home equity, you can reduce your MIP with an FHA refinance loan. If you have more than 5 percent home equity, a conventional mortgage refinance can help reduce your payments significantly.

Home prices in the U.S. have steadily been rising, but now is still a great time to buy a home. Current FHA mortgage rates at Best Rate USA are under 3.5 percent, the lowest they have ever been. If you participate in the HAWK (Homeowners Armed With Knowledge) program, you can lower your upfront and annual MIP, saving you lots of money in the long run.

If you want to save money on your monthly payments or have been thinking of purchasing a new home, now is the time to take advantage of low FHA rates. You can find rates online and talk to a mortgage expert to find out more information.