Trump Scraps FHA Rate Cut — What Does It Mean for You?

What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Shortly after President Trump took office, his administration made a decision that could impact your home loan costs.

President Donald J. Trump has rolled back a planned Federal Housing Administration policy to reduce the insurance premiums people pay monthly on FHA-backed mortgages.

The Los Angeles Times reports that the initiative could have saved homeowners hundreds of dollars annually on mortgage insurance, which is required with FHA-backed loans.

But the new Trump administration killed the planned fee cut on Jan. 20, just a week after the Obama administration first announced the initiative, which was supposed to take effect on Jan. 27.

According to the Times, the Trump administration indefinitely suspended the pending FHA insurance rate cut just an hour after Trump was sworn in as president.

The U.S. Department of Housing and Urban Development oversees the FHA. FHA-backed loans are popular with first-time homebuyers and people with fair to poor credit.

The Obama administration had estimated that homebuyers with FHA-backed mortgages would save an average of $500 a year with the rate cut, the Times reports. It was an effort to offset recent rises in mortgage rates and make buying a home more affordable.

However, Republicans had concerns about the rate cut. According to the Times:

Some Republicans expressed concern that the rate cut could cost taxpayers if the loans started to go sour and the Federal Housing Administration was unable to cover the losses.

If you’re a potential homebuyer considering an FHA-backed loan, you might have to dig deeper into your pockets to pay for mortgage insurance. According to the Times:

For most borrowers getting an FHA-backed loan that means that after paying an upfront insurance fee, you will pay 0.85 percent of your loan amount for premiums each year.

The Obama administration action would have lowered the rate from 0.85 percent to 0.60 percent.

“For most borrowers buying homes with down payments of less than 5 percent, the monthly mortgage insurance payments will remain $141.67 for a $200,000 loan” instead of falling to $100 monthly, Bankrate explains.

What do you think of the Trump administration’s decision to abandon the rate cut? Share your thoughts below or on Facebook.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: The Home Remodeling Projects With the Best Payback

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,044 more deals!