Housing Counseling Can Lower Your FHA Loan Payments
September 30th, 2014
September 30th, 2014
Are you looking to purchase a home and need a loan? A Federal Housing Administration (FHA) loan may be right for you since it’s a popular choice with home buyers. And now, the FHA is offering the Homeowners Armed with Knowledge (HAWK) program as way for American families – especially those with credit scores ranging from 580 to 680 – to have access to more affordable homeownership by reducing their mortgage insurance premiums (MIP).
To receive MIP savings, first-time FHA home buyers must complete a minimum of 6 hours of housing education/counseling through a HUD-approved counseling agency (your lender can recommend an agency) before signing a home purchase contract, before closing and before the 1-year anniversary of your loan in order to earn MIP reductions.
Housing Counseling Requirements
Borrowers must complete the following counseling requirements:
Basis Point Reductions
Upon completion of housing counseling, HAWK homeowners will get:
As an example of the savings a homeowner may obtain, for an FHA loan with an average loan balance of $180,000, borrowers who participate in HAWK can save almost $325 a year in insurance costs – that adds up to about $9,800 in savings over the life of a 30-year loan.
Benefits of Housing Counseling
In recent years, the FHA has been criticized for raising its premiums, making their loans less affordable. The FHA decided to develop HAWK after studies suggested that housing counseling can lead to fewer mortgage defaults. According to a study conducted by NeighborWorks America, first-time home buyers who participate in counseling and education are 30% less likely than borrowers who don’t participate in counseling to default on their mortgage payments within the first two years after closing.
To Sign Up for HAWK
The HAWK program is expected to go live this fall. Contact the mortgage specialists at Grandview Lending at 317.255.0062 for more information. They can answer your questions about the program and help you find an FHA loan that meets your needs.
Photo credit: iStockphoto/Audrey Popov
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