First time home-buyers you are in luck. FHA has unleashed a new program called the HOMEOWNERS ARMED WITH KNOWLEDGE or HAWK program last month for homeowners purchasing for the first time. This program is a way for home buyers to cut their mortgage insurance premium costs by attending counseling classes. The idea behind it is to make home buyers more responsible purchasers when it comes to their mortgage payments, in the wake of the mortgage crisis. The HAWK program announced by the Federal Housing Administration was created with the idea that the more responsible home buyers are, and understand about home ownership, the less likely they are to default on their payments, and thus reduce the risk for FHA.
And… after two years of no delinquent payments, the homebuyers will get even more program discounts and incentives.
Borrowers who take the classes which include several courses about closing, can save an average of $325.00 per year or $10,000 over the life of the loan.
FHA does not write loans, it merely insures them. Therefore, borrowers can get loans FHA backed with as little as 3.5 percent down and a credit score of 560.00. But this type of loan is a huge risk because of the percentage down required. Therefore, while PMI is required, this program will offset the amounts that homebuyers pay over the life of their loan.
Under the program, the homebuyers that take the counseling class BEFORE signing a contract, can earn a 50 basis point reduction in upfront mortgage insurance and a 10 basis point reduction in the annual premium costs. Mortgage insurance premiums would also be cut to 1.35 percent.
The long term savings are impressive and can assist with homebuyers that have faced several hurdles in buying properties because of the additional costs and fees lenders are charging post mortgage crisis.
To find out more, contact us. The first consultation with attorney Jacqueline A. Salcines, Esq. is free of charge and can provide valuable information for making that first and ever so important home purchase.
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