Are you thinking of buying a new home in 2015? Or maybe you’ve thought of refinancing. Now may be the perfect time to take action.

On January 26, the Federal Housing Administration (FHA) reduced the annual premiums paid by new borrowers on mortgages with loan terms over 15 years. (If you plan to get a mortgage of 15 years or less, your annual premiums will remain the same.) Therefore, if you’re planning to buy a new home with a 15+ year FHA mortgage of $625,500 or less, and with a down payment of less than 5%, you’ll now see your premium lowered to 0.85% – down from 1.35%. Helping you to keep more money in your pocket. For example, let’s say you’re getting a $200,000 loan, this premium reduction could save you about $900 annually. The government is hoping these lower premiums will encourage new homebuyers to purchase a new home over the next three years.

While the FHA doesn’t provide mortgages, the premium reduction is for mortgage insurance that you’re required to take out on FHA mortgages with a down payment of as low as 3.5%. This insurance protects lenders in case you were to default on your loan.

Unfortunately, if you already have an FHA loan, this premium reduction won’t affect your mortgage payments. Only borrowers who have case numbers assigned on and after January 26 will be eligible for reduced annual insurance premiums. So if you already have an FHA-insured mortgage, you would have to refinance your loan to get this new rate. So, now may be the time to refinance, especially if you’ll get a break of at least a percentage point by refinancing your loan.

If you have any questions about this mortgage insurance premium reduction, click on this link for information from the U.S. Department of Housing and Urban Development.

You also can contact the mortgage specialists at Grandview Lending in Indianapolis. They can talk with you to determine whether a FHA mortgage is the right solution for needs if you’re looking for a new home loan. Or, if you’re thinking about refinancing, they can help you figure out if a FHA refinance makes sense for you. Call them at 866.690.4920 for more information.

Photo credit: iStockphoto/Brian A Jackson