If you saw the White House announcement of lower insurance payments on Federal Housing Administration home mortgages last week, you might have wondered: Does this matter to me as a potential home buyer or refinancer? Who specifically will benefit from the decrease in fees?
The Obama administration estimates that by lowering FHA’s annual mortgage insurance premiums by half a percentage point, as many as 250,000 new buyers will be able to purchase a house. That’s great news and overdue. FHA almost priced itself out of competition with giant investors Fannie Mae and Freddie Mac by raising its premiums several times in recent years. FHA made itself too expensive and its market share has plunged. [more]