Tuesday, June 3, 2014

What would you do to save $10,000?


Saving money is a hobby of mine.  Maybe you prefer to save versus waste money.  

But can you imagine the Federal Government saving you some?  Seems they are better at spending than saving...oops shouldn't go there.

Federal Housing Administration believe housing counseling could save you nearly $10,000 over the life of a loan(30 years loan I would guess). 

If you have never purchased a home, this would be a great class!
Or if you had a home but been renting for years, this would be very helpful for you also. 

 For us that have had mortgages for years, we could glean information but most likely would be looking in the rear view mirror wondering why we didn't know this sooner.

As you can see, the goal is to raise home ownership.  A very worthy goal as home ownership improves neighborhoods, cities and the country.


Class Could Lower Your Mortgage Costs 

Would you go to a housing counseling education program if it would save you nearly $10,000 over the life of your mortgage? The Federal Housing Administration is betting you would.

It's proposing a new program that would give mortgage insurers premium discounts for homeowners who agree to undergo housing counseling before getting an FHA mortgage.

If the program is approved, you'll get a 50 basis point discount in the upfront FHA mortgage insurance premium you pay at closing, after you take the course. A basis point is 1/100th of 1 percent, so 50 basis points is one-half of one percent. You'll also get a 10 basis point reduction on your annual mortgage insurance premium.

If you do post-closing counseling and go on to pay your mortgage on time for two years, you'll get another 15 basis points knocked off your annual mortgage insurance premium.

How Much You Could Save

On the average $180,000 FHA mortgage, you'll save $9,800 over the life of the loan by completing the housing counseling course and paying on time.

Why is FHA so hot on homeownership counseling? It has research showing mortgage problems are 29 percent lower for first-time homebuyers who get counseling and 15 percent lower for all homebuyers who get counseling, compared to buyers who get no counseling.

During housing counseling, you'll receive individual, objective advice on reaching your housing and financial goals, homeowner rights and responsibilities and managing your credit and savings.

Building Homeownership

The proposed program is part of a bigger effort to help Americans better manage their credit. This will help further homeownership and build lasting wealth.

According to the Urban Institute, the average credit score for loans sold to government sponsored mortgage companies is 752. Currently, there are 13 million people with credit scores ranging from 580 to 680.

"Shutting these consumers out of the market hurts American families and undermines our efforts to build more stable communities, create pathways to the middle class and increase homeownership opportunities for minority and low-wealth borrowers," FHA officials said when they announced the proposed program earlier this month.
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