FHA Mortgage Insurance Reduction & Loan Limits 2015

Welcome to 2015!  I hope you had a wonderful and relaxing holiday season.  Now it’s time for us all to get back to work!  The housing market is on solid ground and interest rates are ridiculously low, so, if you or someone you know is thinking about buying a house, right now may turn out to be the best time in 2015 to be a home buyer!

I want to touch on two items of interest today – 1) An upcoming change to the mortgage insurance premiums FHA charges and 2) Mortgage loan limits for 2015.

FHA Mortgage Insurance Premium Reduction

This week FHA announced a reduction to the mortgage insurance premium (MMIP) it collects monthly on new FHA loans written after January 25, 2015.  You’ll recall, in early 2013 FHA steeply increased the MMIP on FHA loans in response to the high level of FHA loans that had gone into default.  FHA needed the additional MMIP premiums to cover the money being lost on FHA loans that had gone into foreclosure during the housing downturn.  The new premium is set at .85% annually and that is reduction from the 1.35% that it’s been over the past 2 years.  This will save FHA a borrowers a considerable sum!  On a $200,000 loan amount it adds up to a monthly payment savings of $83!  This will really help the FHA loan compete better against Conventional mortgage programs.

Mortgage Loan Limits 2015

Every year loan limits are adjusted based on changes in median sales prices of homes.  The adjustments come from Fannie Mae and Freddie Mac for Conventional loans,  from Dept of HUD for FHA loans and from the Veterans Administration for VA loans.  The loan limit is the maximum loan size that you can borrow within that loan type.   When a loan exceeds the conventional loan limit it is a Jumbo Mortgage and may have different interest rates and qualifying guidelines.  Here are the loan limits for 2015:

CONVENTIONAL LOANS                                          $417,000

FHA LOANS (Oakland, Macomb, Wayne)                            $271,050

VA LOANS                                                                 $417,000

Basically, there is no change in loan limits for 2014 to 2015!  As always, if you have home loan questions, are thinking of buying or refinancing a home, or know someone who is, please give me a call as I am here to help.

Here’s to a happy, healthy and prosperous New Year!