FHA to Lower Annual Mortgage Insurance Premium from 1.35% to 0.85%

President Obama issued a Fact Sheet today outlining the changes to the FHA Annual Mortgage Insurance Premium (MIP) - from 1.35% to 0.85%.

This 1/2% reduction will make homeownership more affordable for many people.  A home buyer with a base mortgage of $150,000 would save $62.50/month on their monthly mortgage payment.

It is estimated that about 800,000 homeowners will take advantage of these lower MIP rates in the first year alone.  And, this decrease will create an opportunity for an additional 250,000 homeowners to purchase a home over the next three years.

These new rates are not yet in effect but will be soon.  As soon as they are I will update this blog.

Please contact me with any questions at 708.473.7688 or BarkerLoans@gmail.com.

Important Tax Breaks for Homeowners Extended by Congress

Congress recently extended two important tax break for homeowners:

1. Mortgage insurance (MI) paid with your mortgage can be claimed as a deduction on your Schedule A along with your mortgage interest and real estate taxes.  This extension is retroactive to January 1, 2014 so it covers MI paid all year.  Income restrictions apply.

2. Mortgage debt forgiven in a short sale in 2014 will NOT be taxable.  In a short sale, a house is sold for less than the balance of the mortgage.  Usually, the mortgage company will issue a 1099 to the borrower for the difference between the mortgage balance and the proceeds of the short sale and that amount is taxed as ordinary income.

Make sure you consult a tax professional for questions regarding these or any other tax breaks available to homeowners.

For questions regarding your mortgage, or to apply for a new mortgage, please contact me at BarkerLoans@gmail.com or 708.473.7688.