In America, we have several federally backed government home loan programs designed to help home buyers purchase a home more easily. These programs provide a framework for buyers including a range of qualifications like income, credit score, low down payments. They also help families qualify with low income, low credit, and no down payment. Created and managed by the U.S. Department of Housing and Urban Development (HUD), they are designed to help and protect you, the home buyer and homeowner — not make it harder for you to afford your home.
HUD recently made changes that make it even harder for homeowners and home buyers afford a home. We are now forced to pay mortgage insurance premiums (MIP) for the life of your mortgage. This is a tremendously expensive fee, that can run anywhere from $1,000 to $3,000 per year and higher. The only way to have this MIP fee removed from your mortgage is to pay the loan off completely or refinance with a certain amount of equity. For a period of 13 years between December 2000 and July 2013, HUD allowed cancellation of the FHA MIP fee once you reached around 20% equity in your home or after 24 months.Now the HUD requires MIP to be paid for the lifetime of the loan.
This cost home buyers a lot of money over the life of the loan. For example, a home buyer who purchases an FHA mortgage for $180,000 with a credit score of 650 has a MIP fee of around $2,400 per year. Multiply that by the length of your mortgage, normally 30 years, that comes out to $72,000 of your money, taken from you.So, instead of purchasing a house for $180,000, you’re paying an extra $72,000 in MIP fees plus bank interest. As homeowners, we cannot sit idly by and allow our government and financial institutions to scam money right out of our pockets. These current policies force homeowners that want to stop paying the MIP fee to either refinance or finance using a non FHA loan, extending their loan out even longer. These fees could make your mortgage payment go from affordable to not.
Regardless of if currently own a home or are looking to eventually own one. Help stop homeowners being forced to foreclose because they can’t afford the extra unnecessary monthly MIP fees by signing this petition and telling HUD that enough is enough.