Zillow Will Now Buy Your Home for Its Zestimate Price

Posted on February 25th, 2021

Zillow appears to be putting its money where its mouth is by offering to buy properties at their Zestimate price.

No longer is the Zestimate just a number you can fantasize about, assuming your home qualifies for the company’s iBuying program known as Zillow Offers.

The Zestimate Turns 15 Years Old

  • Zillow introduced the Zestimate all the way back in 2006
  • They claim it was the first time homeowners had instant access to free estimated home values
  • Zestimates are published for nearly 100 million homes nationwide with a median error rate for on-market homes of just 1.9%
  • Today’s algorithm uses public records, feeds from MLSs, artificial intelligence, computer vision, and a deep-learning neural network that even factors in photographs

Zillow’s new initiative coincides with the 15th anniversary of their popular home valuation tool known as the Zestimate.

The free quasi-appraisal tool was launched in 2006 and essentially put Zillow on the map by providing homeowners and prospective home buyers with a quick tool to see what a home was worth.

Today, their complex algorithm goes beyond public data and MLS feeds and uses things like artificial intelligence and computer vision that allows it to incorporate data from photographs.

In other words, if images are uploaded that show a new kitchen or bathroom, or even just new paint or more expensive fixtures, your Zestimate might get a boost.

They claim all these improvements to the always-evolving Zestimate give it a median error rate of just 1.9% for on-market homes.

While that sounds pretty impressive, it doesn’t mean you should just sell your home to Zillow and call it a day.

Where Zillow Is Buying Homes for Their Zestimates

Sell for Zestimate price

  • If your home is eligible you’ll see an initial cash offer prominently displayed at the top of your property listing page
  • The initial offer is before taxes/fees are factored in and also subject to the accuracy of property information
  • Currently available in a large number of markets including Phoenix, Charlotte, Orlando, San Diego, and Los Angeles
  • The company plans to expand the pool of eligible homes over time as the Zillow Offers platform grows

At the moment, the company’s “buy at the Zestimate price” deal is available on a limited number of homes in markets where Zillow Offers currently operates.

This includes a pretty large number of cities, including:

  • Phoenix and Tucson, Arizona
  • San Diego, Los Angeles, Riverside, and Sacramento, California
  • Denver, Colorado Springs, and Fort Collins, Colorado
  • Miami, Jacksonville, Orlando, and Tampa, Florida
  • Atlanta, Georgia
  • Minneapolis, Minnesota
  • Las Vegas, Nevada
  • Charlotte and Raleigh, North Carolina
  • Portland, Oregon
  • Nashville, Tennessee
  • Dallas, Houston, and San Antonio, Texas

To see if your home is included, simply head over to your property’s listing page on Zillow and look for a prominent “Sell to Zillow for your Zestimate” box.

If it’s there, this means you can begin negotiations at that price, before the company factors in things like taxes, fees, and repair requests.

Their offer is also subject to eligibility and accuracy of property information. In other words, they’ll need a human being to back up the findings of their Zestimate technology before they proceed with an offer.

My assumption is the more cookie-cutter the property, the more likely it is to have one of these instant offers.

That means a property in a housing tract that is moderately priced and similar to other properties nearby.

Conversely, they probably aren’t doing this for high-priced properties or homes that have unique features.

Is Selling at the Zestimate Price a Good Deal?

  • Zillow has referred to the Zestimate as a starting point in the past
  • And that could still be the case if you take them up on this offer once they negotiate the price
  • They’ll also factor in repair costs, listing costs, their service fee, and more
  • When all is said and done you could be looking at sales proceeds that are 10%+ below the Zestimate

While Zillow boasts about its high accuracy rate for the Zestimate, it doesn’t mean it’s a no-brainer to just sell your home to Zillow.

While they claim their median error rate is just 1.9% for listed properties, what about properties that aren’t listed, i.e. YOUR HOME.

Personally, I always feel that the Zestimate is lower than the comparable Redfin Estimate, and often lags home price data.

In other words, the Zestimate typically displays a price that feels a little bit in the past, whereas the Redfin Estimate appears to show a more forward-looking price.

Put another way, the Zestimate seems to mirror what someone paid for a home, while the Redfin Estimate often feels more like what a buyer would pay.

That’s just my personal opinion, but I’ve been tracking these numbers for years, and I’ve rarely seen a Zestimate that’s higher than a Redfin Estimate.

This is especially important given the fact that it’s a seller’s market at the moment.

Lastly, you need to consider the fees charged for selling to Zillow Offers, including prep and repair costs (they’ll be reselling your home quickly), along with the Zillow service charge.

They say that service charge is 2.5% on average, which is on top of the ~6% in selling costs that mirrors what a pair of traditional real estate agents would earn, along with 1-2% for closing costs like transfer taxes, escrow, etc.

All said, you could be looking at 10% off the Zestimate, not including repair requests, so your actual walkaway cash could be much lower.

Of course, the same can be said of a traditional sale (minus that service charge), and you get to sell immediately without the usual inconvenience, aggravation, and uncertainty.

But that’s where the service fee comes in. It’s more like a convenience fee.

In any event, this is an interesting development and a sign that Zillow wants its Zestimate to serve a larger role than just a free home price estimate.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

7 Ways Americans Plan to Ensure a Financially Secure Retirement

Older couple with financial planner
EdBockStock / Shutterstock.com

A secure retirement is in your hands — and nobody else’s.

For better or worse, we all have to finance our own retirement. Sure, Social Security and Medicare will help. But workplace pensions are rare, and few will inherit fortunes from their parents, or anyone else.

Fortunately, many Americans understand and accept this reality. They are taking steps long before retirement to make sure they will not struggle financially during their post-work years.

Recently, the National Institute on Retirement Security asked 1,200 people 25 and older what they are doing to ensure a financially secure retirement. Below are the methods they cited most often.

7. Seek work in retirement

Senior worker
gpointstudio / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 39%

When the chips are down and you need more cash, nothing tops working and earning a regular income. It is the single most effective way to quickly add to your bottom line.

The survey respondents clearly understand that fact. Few of us want to work a full-time job in retirement — we gave up the 9-to-5 for a reason, after all. But there are plenty of opportunities to earn part-time income that can make a crucial difference in retirement.

For more, check out “20 Great Part-Time Jobs for Retirees.”

6. Save about 5% more than you currently do

Woman with piggy bank
Jason Stitt / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 40%

Most of us find it difficult to save as much as we do now, let alone 5% more. But saving just a bit extra can make an enormous difference, especially if you do it for many years and invest the money well.

If the thought of saving more scares you, we can relate. Maybe it’s time to sit down with a financial pro who can help you craft a savings and investment strategy that will pay a lifetime of dividends. Stop by Money Talks News’ Solutions Center and search for a fee-only financial planner who can offer expert advice.

5. Delay claiming Social Security

Social Security payments
Steve Heap / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 41%

As we have pointed out, sometimes it does not pay to delay applying for Social Security benefits. But in other cases, waiting to file can be one of the smartest financial decisions you will ever make.

For every year you wait to claim past your full retirement age, your benefit will grow by as much as 8%. That is tough to beat.

For many people, this decision — to delay or not to delay — is a vexing one. If you need help, stop by Money Talks News’ Solutions Center and check into working with Social Security Choices, a company that can help you determine when is the best time to claim given your personal situation.

3. Save about 1% to 4% more than currently (tie)

Photo (cc) by American Advisors Group

Respondents who plan to do this to ensure a financially secure retirement: 48%

Remember that notion of saving 5% more? If that is too intimidating a challenge, don’t be afraid to take a more modest approach, like saving 1% to 4% more.

At Money Talks News, we believe that saving a little over a long period of time can add up to big things. It’s a gospel we preach because many of us have lived it out and have seen the power of this strategy up close. The survey respondents apparently agree.

For more tips on getting started saving, read “The 7 Fastest Ways to Catch Up on Retirement Savings.”

3. Cut back spending once retired (tie)

saving money
Dean Drobot / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 48%

Those who need more cash but don’t want to work have one option left: to spend less.

This is often easier said than done. But if you find ways to trim back expenses, you open up more breathing room in your budget.

One way to spend less during your golden years is to retire in a place where the cost of living is lower. Money Talks News founder Stacy Johnson discussed some options in a recent podcast, “5 Countries Where You Can Retire on $2,000 a Month or Less.”

2. Cut back current spending

A surprised man looks at his empty wallet in shock
ToffeePhoto / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 55%

Cutting back on spending in retirement can be painful. It’s a lot easier to trim your budget now, while you are still working and have a steady income.

Trim your sails today, and you will have more money to invest in a nest egg that will see you through your golden years. Creating a budget can help you find places to cut expenses.

Some people find budgeting to be a pain, but Money Talks News partner YNAB (short for “You Need A Budget”) makes the process easy. The YNAB app helps you track day-to-day expenses, prepare for unexpected costs and build savings.

You can even connect the program directly to your bank and credit card accounts, which allows you to download transactions to YNAB automatically so you don’t have to manually enter them one by one.

For more, check out “An Easy Way to Track Your Spending and Build Your Savings.”

1. Stay in your current job as long as possible

Senior at a computer
Stocklite / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 60%

Even if you really want to retire soon — like yesterday — sometimes it simply makes more sense to stick with that job a little longer.

The survey respondents are clearly a tough-minded, clear-eyed bunch. A full 60% say they plan to work as long as possible to ensure they have a secure retirement.

It is a great idea — tough to beat, actually. But it is not always practical. Gallup polling has found that the average age at which workers retire is a fairly young 61. Sometimes unexpected life changes or health problems can prevent you from working as long as you planned.

So, if you are working today, remember that now is the best time to save and to create a plan for that dream retirement down the road.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

6 Top Robo-Advisers for Investing

Getting started on retirement saving can be daunting when there are so many confusing options. There are thousands of stocks, not to mention other complex-sounding things to buy: bonds, mutual funds, exchange-traded funds, futures. And when you start reading about them, you’re liable to run into an impenetrable wall of investment jargon. So do you go it alone, taking shots in the dark with your…

Source: moneytalksnews.com

The Fair Housing Act now applies to LGBTQ renters and home buyers. Here’s what changed

HUD is expanding the Fair Housing Act

Trans and other members of the LGBTQ community are now protected under the Fair Housing Act, according to an announcement from the Department of Housing and Urban Development late last week.

The agency will now investigate complaints of housing discrimination relating to sexual orientation and gender identity — two classes not previously protected under the law. 

This is a critical change; HUD has recognized the history of housing discrimination against LGBTQ individuals and is offering legal protection to those affected for the first time.

Verify your home buying eligibility (Feb 16th, 2021)

LGBTQ housing discrimination: An “urgent” issue

“Housing discrimination on the basis of sexual orientation and gender identity demands urgent enforcement action,” said Jeanine M. Worden, the acting assistant secretary of HUD’s Fair Housing office.

“That is why HUD, under the Biden Administration, will fully enforce the Fair Housing Act to prohibit discrimination on the basis of gender identity or sexual orientation.”

Worden continues, “Every person should be able to secure a roof over their head free from discrimination, and the action we are taking today will move us closer to that goal.”

This change is in line with the Biden Administration’s goals to reduce discrimination in housing, and to make renting and home buying more accessible and affordable.

What are Fair Housing protections?

The Fair Housing Act — technically Title VIII of the Civil Rights Act of 1968 — protects Americans from discrimination when:

  • Renting or buying a property
  • Applying for a mortgage
  • Seeking housing assistance
  • Participating in any other housing-related activity

Seven classes are explicitly protected in the Act, including race, color, national origin, religion, familial status, disability and sex. 

Prior to HUD’s latest announcement, “sex” had meant biological sex.

Now, under the new expansions, the Fair Housing Act also protects against discrimination based on gender identity and sexual orientation as well.

How this change helps LGBTQ renters and homebuyers

Thanks to the changes, LGBTQ Americans can now file complaints with HUD if they feel they’re discriminated against at any point while seeking housing.

This could include discrimination by a real estate agent, mortgage professional, rental property owner, apartment manager, or anyone else involved in the housing process.

HUD offers two examples of what LGBTQ housing discrimination might look like:

  • “A transgender woman is asked by the owner of her apartment building not to dress in women’s clothing in the common areas of the property.”
  • “A gay man is evicted because his landlord believes he will infect other tenants with HIV/AIDS.”

If you’ve experienced these or any other types of housing discrimination because of your gender identity or sexual orientation, file a complaint at HUD.gov/FairHousing.

Complaints dating back to January 20, 2020, will be investigated.

Why the Fair Housing Act is being expanded

There are three reasons HUD has expanded Fair Housing protections to trans and other LTBTQ Americans.

First, there’s President Biden’s Day 1 executive order, which calls on government agencies to “prevent and combat discrimination on the basis of gender identity or sexual orientation.”

According to agency spokespeople, HUD is the first department to comply with this executive order.

A new interpretation of the law

The recent Supreme Court case Bostock v. Clayton County also plays a role. In the 2019 case, the court found that a transgender worker’s firing was a direct violation of the Title VII of the Civil Rights Act and that “sex” protections did indeed apply. 

“Homosexuality and transgender status are inextricably bound up with sex,” Justice Neil Gorsuch wrote.

“Not because homosexuality or transgender status are related to sex in some vague sense or because discrimination on these bases has some disparate impact on one sex or another, but because to discriminate on these grounds requires an employer to intentionally treat individual employees differently because of their sex.”

According to HUD, the ruling clarified how the Civil Rights Act — including its Fair Housing provisions — should be interpreted moving forward.

“Enforcing the Fair Housing Act to combat housing discrimination based on sexual orientation and gender identity isn’t just the right thing to do-it’s the correct reading of the law after Bostock,” said Damon Y. Smith, HUD’s principal deputy general counsel.

“We are simply saying that the same discrimination that the Supreme Court has said is illegal in the workplace is also illegal in the housing market.”

A history of housing discrimination

HUD also cited numerous studies surrounding housing discrimination and the LGBTQ community in its decision to expand Fair Housing protections.

One study, for example, found that same-sex male couples were significantly less likely to receive responses when seeking a rental property. Another found discrimination against transgender women in homeless shelters.

With the expansion of the Fair Housing Act, there’s now a legal path to recourse for individuals who have been barred from housing or discriminated against in this manner.

Source: themortgagereports.com

You Can Now Request COVID-Related Mortgage Forbearance for Up to 15 Months

Posted on February 10th, 2021

Some good news this morning for homeowners continuing to struggle to make ends meet thanks to COVID-19, which as the name implies has been going on for a while now.

The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, has just announced an extension to the COVID forbearance period, which was previously capped at 360 days.

Now borrowers who requested mortgage forbearance back in March or April of 2020 will be able to get another few months to keep monthly payments on hold.

COVID-Related Mortgage Forbearance Extended Another 3 Months

  • Homeowners with a Fannie/Freddie-backed mortgage can now request an additional three months of forbearance
  • Originally allowed for an initial 180 days of payment relief (and an additional 180 days if the borrower needed more time)
  • Now borrowers can get a full 15 months of mortgage payment relief if in a COVID-19 forbearance plan
  • Applies to those who are in a COVID-19 forbearance plan as of February 28th, 2021

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) originally allowed homeowners with a federally-backed residential home loan to request forbearance for up to 180 days, or roughly six months.

It also included a 180-day extension if they were still struggling to make mortgage payments at the end of the original 180-day term.

Now the FHFA has gone step further by allowing an additional three months of relief, for a grand total of 15 months of suspended mortgage payments.

In other words, a homeowner who is unable to pay their mortgage due to COVID-19 can now set aside payments for a whopping 540 days.

While it might sound excessive, it’s a sign of the lasting economic effects of COVID, which is now into its third year with no clear sign of slowing.

All 15 Months of Missed Mortgage Payments Can Be Deferred

  • Homeowners who request all 15 months can also set aside the full amount to repay later
  • The COVID-19 Payment Deferral option has been adjusted to cover up to 15 months of missed payments
  • The missed payments are not due until the home is sold, the mortgage refinanced, or when the loan matures
  • This should make it easier for those struggling with a COVID-19 income disruption to remain in their homes

In line with the three-month extension, the FHFA noted that it will also allow borrowers to defer the full 15 months of mortgage payments via the COVID-19 Payment Deferral option.

This means they won’t need to repay any of that sum until the underlying property is sold, the mortgage is refinanced, or when the home loan matures.

Do keep in mind that there is a three-month waiting period to get a mortgage after forbearance ends.

So if you request another extension, you’ll have to wait that little bit longer to get a subsequent mortgage backed by Fannie Mae or Freddie Mac.

The FHFA also extended the moratoriums on single-family foreclosures and real estate owned (REO) evictions until March 31st, 2021.

Previously, they were set to expire on February 28th, 2021. The foreclosure moratorium applies to Fannie- or Freddie-backed, single-family mortgages only.

And the REO eviction moratorium applies to properties acquired by Fannie or Freddie via foreclosure or deed-in-lieu of foreclosure transactions.

The only lingering question now is the deadline to apply for mortgage forbearance.

While you can apply until March 31st, 2021 if you have an FHA loan, USDA loan, or VA loan, those with Fannie and Freddie loans currently only have until the end of this month.

Whether that date gets extended remains to be seen, but my guess is they’ll push that date out as well. Still, if you need help, you probably don’t want to waste time in case they don’t.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

President Biden could reduce FHA mortgage insurance premiums. Here’s what it means for you

FHA mortgage insurance might get cheaper this year

“Mortgage industry abuzz with speculation of FHA MIP cut,” stated one trade magazine on January 28. And that journalist was right.

Many insiders are confidently predicting a big cut in the Federal Housing Administration’s (FHA’s) annual mortgage insurance rates.

FHA borrowers currently pay 0.85% annually in mortgage insurance premiums (MIP). That’s $1,700 per year, or $140 per month, on a $200,000 mortgage.

So it’s no wonder a possible MIP rate cut is big news. It could help new home buyers and refinancing homeowners save big on their housing payments.

Verify your FHA loan eligibility (Feb 8th, 2021)

Why experts think Biden will lower mortgage insurance premiums

Lowering FHA mortgage insurance rates isn’t a new idea from President Biden. It’s a holdover from former President Obama’s agenda.

American Banker magazine explains “The Department of Housing and Urban Development under former President Barack Obama had announced a scheduled 25-basis-point [0.25%] reduction in the FHA’s annual mortgage insurance premiums just before President Donald Trump took office.”

But Trump reversed this change at the start of his term, leaving FHA MIP rates at 0.85% per year.

Now, says American Banker, “observers expect the Biden administration to follow through on that 25-basis-point cut and potentially go even further.”

Lowering FHA MIP costs would be right in line with President Biden’s goals of expanding affordable housing opportunities for low- and middle-income families.

Of course, this is only speculation for now. No official announcements have been made.

But the pervasiveness of the rumor — and the absence of denials from the administration — mean a change seems likely.

So potential home buyers and FHA homeowners should be aware of what the (potential) change would mean for them.

What an MIP reduction could mean for you 

There’s good news and bad news.

The bad news is that if you already have an FHA loan if and when the reduction takes effect, you won’t see any savings. You would have to refinance into a new FHA loan to see the reduction.

The good news is that if you haven’t applied for an FHA loan yet if/when the cut is announced, you can likely take advantage of the new, lower fees.

But just how much would home buyers and refinancers stand to save?

A 25-basis-point reduction means MIP rates would fall by 0.25%. So you’d be paying 0.6% of your loan balance each year instead of the 0.85% that nearly all FHA borrowers now pay now.

These mortgage insurance rates are calculated annually but charged monthly.

Example: 0.25% MIP rate cut

Let’s say you plan to borrow $200,000 with an FHA loan. Your MIP rate at current levels would be 0.85%, making an annual charge of $1,700 — or $140 per month.

Now let’s assume the new MIP rate falls to 0.6%.

Your annual charge tumbles to $1,200. And your new monthly MIP cost would be exactly $100 per month.

That’s a saving of $500 a year, which few of us would sneeze at. But there’s a possibility that the savings could be even bigger.

Example: 0.50% MIP rate cut

American Banker wondered whether the Biden administration might “potentially go even further.”

So how does the math work if annual MIP rates were to be cut a little more — to 0.5%?

Assuming the same $200,000 loan, a 0.5% rate would reduce the annual payment to $1,000. And that would make the monthly payment just $83 versus $140 per month at current levels.

That would save you $700 a year over your current payment.

Rates haven’t changed yet…

Remember: this is just speculation. Unless and until an official announcement is made, you should continue to budget for your full, existing 0.85% MIP rate.

But if you’re considering a home purchase or refinance later this year, you should keep an eye out for news from the Department of Housing and Urban Development (HUD).

If a change is announced, it could be worth waiting on that application until you can secure the lower rate.

Verify your FHA loan eligibility (Feb 8th, 2021)

What happens to existing FHA loans?

Homeowners with an existing FHA loan may not benefit from lower mortgage insurance premiums right away.

An MIP rate reduction likely would not change the terms of your current mortgage.

So if a change is announced, you’d have to refinance into a new FHA loan to take advantage of MIP savings.

Keep Streamline Refinancing in mind

The good news is that FHA borrowers may well be in line for an FHA Streamline Refinance — a simplified, low-doc refi program.

FHA Streamline loans typically come with minimum paperwork, low costs, and no credit check. You likely won’t need a new home appraisal or income verification.

However, you’ll have to pay closing costs yourself — only the upfront mortgage insurance charge can be rolled into the loan balance.

And cashing out is not allowed with the FHA Streamline program. If you want cash-back with your refinance, you’ll need the FHA cash-out loan, which requires full underwriting.

How the MIP cut could contribute to the FHA Streamline “net tangible benefit” rule

Right now, FHA Streamline Refinances have a requirement that you gain a ‘net tangible benefit’ (some clear monetary advantage) as a result of using one.

This typically means you need to lower your ‘combined rate’ (mortgage interest plus mortgage insurance) by at least 0.5%.

Say the Biden administration does cut MIP rates by 0.25%. Under the current rule, you’d also need to lower your mortgage interest rate by 0.25% to be eligible for Streamline Refinancing.

But with rates trending downward through 2020 and into 2021, it’s quite likely that a 0.25% reduction is in reach.

But do keep in mind that your current FHA loan has to be at least 210 days old before you’re allowed to refinance.

When could the change take place?

Some mortgage industry insiders are expecting an announcement during President Joe Biden’s first 100 days in office. And they may be proved right.

But there’s a reason we rarely quote speculation from mortgage industry insiders. They’re often wrong.

And the fact is, nobody outside the government knows whether there will be an announcement at all, let alone its likely date. Which raises an important question: What are you supposed to do with this information?

What are you supposed to do with this information?

We wouldn’t be sharing this speculation with you if we didn’t think there was a good chance of the rate cut really happening. But there’s no guarantee it will.

So you probably shouldn’t change immediate plans to purchase a home or refinance.

Today’s FHA mortgage rates are at historic lows — and your interest rate has a much bigger impact on your total loan cost than your mortgage insurance rate.

If you wait on a rate cut and miss today’s low interest rates, it could negate your savings. You could also risk losing out on your dream home by waiting for financing.

Keep in mind, you only need to wait 210 days — about 7 months — from your FHA home purchase or refinance before you can refinance again.

If Biden does cut MIP rates, the change will be long-term. So you can always refinance if it makes financial sense for you to do so later on.

Verify your FHA loan eligibility (Feb 8th, 2021)

Will other aspects of FHA loans change?

Most people who opt for an FHA loan do so because it’s the easiest, most affordable path to homeownership that’s open to them.

American Banker describes FHA borrowers as, “traditionally first-time homebuyers and largely minorities and lower-income earners.”

And they choose FHA loans because they can get approved with lower credit scores and higher existing debts than Fannie Mae, Freddie Mac, and other conventional loans usually allow.

None of that’s likely to change if the Biden administration comes through with the rumored changes.

The only difference should be the amount these borrowers have to pay for their annual mortgage insurance.

Remember, there’s also an upfront mortgage insurance (UFMIP) fee equal to 1.75% of the loan amount. Most borrowers roll this into their loan balance so they don’t have to pay it at closing.

So far, we haven’t heard talk of the UFMIP rate changing — only the annual mortgage insurance premium of 0.85%.

The bottom line

An FHA MIP reduction would be a great win for borrowers, helping to keep monthly housing costs low.

If you plan to buy a home or refinance via an FHA loan later this year, there’s a good chance you could see lower mortgage insurance premiums.

But if you’re already in the process of buying or refinancing, we don’t recommend waiting on news of lower MIP rates. You’re likely to see bigger savings by taking advantage of today’s ultra-low mortgage rates.

Verify your new rate (Feb 8th, 2021)

Source: themortgagereports.com