Changes to lending guidelines hope to spur first time home buyer sales.
It’s a fact that buying real estate is one of the best investments you’ll ever make. Aside from the growth in equity that will add to your overall wealth, homeowners are entitled to certain tax benefits not afforded to renters.
That being said, there are new incentives available in 2015 that should give those who are “on the fence” about buying a home new reasons to consider.
1. Cost of Private Mortgage Insurance Is Dropping
Private Mortgage Insurance, or PMI, is required for certain loans obtained by home buyers using 3 percent (or less) of the purchase price of a home as a down payment. The premium is applied as a fee on top of your loan amount. Typically the cost of PMI equaled 1.35% of the total amount of the loan. The Federal Housing Administration (FHA) has recently announced they will drop the cost of PMI by nearly 38%. to .85%. This means the average home buyer can save up to $900 per year.