Here's how first-time homebuyers can save $800 per year on a $265K home in the Triangle
First-time homebuyers have a new incentive to buy now.
On Wednesday, the Biden administration announced plans to cut mortgage insurance costs. The move will save an estimated 850,000 home buyers — primarily low- and middle-income and first-time buyers — an average of $800 on home financing costs this year.
The move affects mortgage insurance premiums paid by new borrowers who take out loans insured by the Federal Housing Administration [FHA]. It will reduce the annual premium by 30 percentage points, from 0.85% to 0.55%.
The changes will not go into effect until March 20. There is hope that some people who felt like they were pushed out of the housing market will now believe they can get back in.
The move would save a buyer in the Triangle about $800 per year on a $265,000 home.
Noah Summers has considered the idea of purchasing his own home one day, but said, “I’m still saving and putting away everything I can. Hopefully, I can get a nice house from start.”
Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon explained, “What this means if you are a first-time homebuyer [is] an FHA mortgage is better for you today than yesterday because the price is a little bit lower.”
WRAL News asked Gordon if now is the time to decrease housing costs with the ongoing battle with inflation and U.S. debt continuing to climb.
“This is the most important time to offer this,” Gordon said. “Housing affordability is at all-time low. We know that home ownership is important for individuals and families.”
Even with the bonus, Summers is not ready to jump in the housing market.
“Not enough money still,” he said. “[I’m still] saving. I want to make sure I make the right choice.”
