Last week I posted a blog about the Federal Housing Administration (FHA) lowering its high fees for mortgage insurance. This was confirmed by Mortgagee Letter 2015-01 for FHA loans with case numbers issued on or after January 26, 2015. For the majority of buyers, the rate will reduce from 1.35% of the loan amount to 0.85%, which is a pretty hefty reduction.

The letter communicates revised annual MIP rates for FHA Title II forward mortgages and provides opportunity for cancellation of existing case numbers in order to utilize the MIP rates contained in the ML.

Below is an example of the savings one would have:

A $300,000 loan with the minimum 3.5% down payment leaves a loan amount of $289,500.

Loans Closed Prior to January 26, 2015
$289,500 x 0.0135 = $3,908.25                                   $3,908.25 / 12 Months = $325.69

Loans Closed Prior to January 26, 2015
$289,500 x 0.0085 = $2,460.75                                   $2,460.75/ 12 Months = $205.07

That’s a total savings of $120.62 per month just in their mortgage insurance! That does not even include the savings that they will have when lowering their interest rate also! If they went from a 4% rate down to a 3.5% rate, that’s another $82.13 in savings a month for a total monthly savings of $202.75!

There will be a substantial amount of people that will love saving money like this. We already have clients marketing these FHA mortgage holders as of this week with direct mail. We have many letters and snap packs that would be a great fit for this offer.

Head over to our contact page and send us an email or give us a call today so we can help you fill your pipeline with FHA prospects!