Nationwide, borrowers would save an average of $446 per year under the new cuts, according to new data from ATTOM Data Solutions – but in some markets the annual savings could be $1,000 or more.
recently announced it was cutting its insurance premium by 25 basis points, from 85 to 60. Based on a 2016 median sales price of $185,000 for homes sold to buyers using an FHA loan
, borrowers’ monthly payments would drop by an average of $37 per month, or $446 per year. Over the course of a decade, those borrowers would save an average of $4,463 on their mortgage payments.
In some of the more booming markets, savings would be even greater. The biggest potential annual savings would be in California’s Santa Clara County, where borrowers would save an average of $1,448 per year. Borrowers in Honolulu and Maui, Hawaii, would save $1,399 and $1,253 per year, respectively, and Alameda County, Calif., borrowers would save $1,267 per year.
Bay County, Michigan, would see the smallest potential annual savings with an average savings of $193. Borrowers in Michigan’s Saginaw County would see annual savings of $205, Trumbull County, Ohio borrowers would see savings of $213, and Rock Island, Ill., borrowers would save $238 per year.
“The last FHA premium cut two years ago helped to trigger a relatively short-term jump in home sales to FHA buyers, who are typically first time homebuyers without much saved up for a down payment,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Prices of homes backed by FHA loans
also accelerated higher in the wake of that last premium cut, although that premium cut occurred concurrently with a drop in mortgage rates, a scenario that is less likely this time around.”
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The Federal Housing Administration’s mortgage insurance premium cut, set to take effect later this month, could said your borrowers a considerable amount of money.