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VA and FHA loans are getting cheaper! With changes in fees, more borrowers qualify and save money. See below for specifics…
VA Loan Changes
The U.S. Department of Veteran Affairs (VA) is implementing reduced VA Funding Fees for purchase and cash-out refinance loans. Streamline (IRRRL loan) Funding Fees will remain the same. These changes will apply for loans closed on or after April 7, 2023.
All first-time use VA loan fee buckets are being reduced by .15%. For example, a veteran purchasing a home with < 5% down would pay a 2.3% VA Funding Fee. After April 7, that will reduce to 2.15%. On a $400,000 loan, that would save $600 in VA Funding Fees!
Subsequent use VA loan fee buckets are being reduced by anywhere from .15% - .30%, pending the down payment amount.
FHA Loan Changes
The Federal Housing Administration (FHA) will be dropping its Mortgage Insurance Premiums (MIP). These changes will apply for loans closed on or after March 20, 2023.
All FHA loans will see a 30 basis point reduction. So in the case of a $400,000 loan, a borrower would save $1,200 in the first year of their mortgage due to this MIP reduction by FHA.
The FHA estimates this reduction will benefit 850,000 borrowers in the next year, saving over $678 million in total MIP premiums in the first year.
Contact us if you have any questions on how a VA or FHA loan may work for you…we’re happy to help!