Mortgage rates jumped substantially this morning. Thirty-year fixed rates rose by 10 basis points, and 15-year fixed rates rose by nine basis points, while 5/1 ARM rates saw a smaller bump at four basis points, according to a NerdWallet survey of mortgage rates published by national lenders on Thursday.
Trump could repeal FHA MIP reduction, according to reports
Reports surfaced yesterday about the possibility of the incoming Trump administration delaying, and even repealing, the latest FHA mortgage insurance premium reduction, which is slated to go into effect Jan. 27. The reduction, which would cut annual mortgage insurance premiums on most FHA loans by a quarter of a percent, was announced last week by the U.S. Department of Housing and Urban Development.
The insurance premium reduction is largely supported by housing industry professionals, and is estimated to save new FHA borrowers about $500 this year.
Responding to the possible repeal or delay, National Association of Realtors president William E. Brown said in a statement to NerdWallet, “We’re disappointed having heard reports that the mortgage insurance premium cut was included in a wider regulatory freeze, but it’s important to remember that this policy wasn’t singled out. That leaves the door open to implement the cut in the near future.”
“According to our estimates, roughly 750,000 to 850,000 homebuyers would face higher costs and 30,000 to 40,000 new homebuyers will be left on the sidelines in 2017 without the cut,” Brown said. “For now, we believe that the benefits of the mortgage insurance premium cut will shine through during this review period so it can be quickly put back into place.”
A Trump transition spokesperson told Politico reporter Lorraine Woellert yesterday that a decision hasn’t been made yet on the insurance premium reduction.
“The incoming policy team has not seen the model the outgoing administration used, nor their analysis, and nothing was communicated to the incoming team before the announcement was made,” the Trump spokesperson told Woellert. “The new team looks forward to seeing the financials to ensure there is the right balance between encouraging sustainable home ownership at an individual level and protecting taxpayers against future losses to the entire program.”
“No determination has been made on this last-minute policy change by Secretary Castro that could detrimentally impact FHA’s reserves,” the spokesperson said.
Homeowners looking to lower their mortgage rate can shop for refinance lenders here.
NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.
Michael Burge is a staff writer at NerdWallet, a personal finance website. Email: [email protected].
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