INDIANAPOLIS, Ind. - Home buyers across Indiana are learning they'll have to pay more for their dream home than they initially thought after a promised mortgage insurance rate cut was halted.
President Obama’s team announced a FHA mortgage insurance premium cut from 0.85% to 0.60% during his final days in office. It was supposed to go into effect on January 27.
On Friday, the Department of Housing and Urban Development said the reduction to the annual mortgage insurance premiums borrowers pay when taking out government-backed home loans has been “suspended indefinitely.”
“We were shocked. We were very shocked," said Kim Hockaday, a Senior Loan Officer at RUOFF Home Mortgage.
She said the announcement of the cut was a very exciting time for home buyers who were looking forward to a discount.
"If you are getting $100,000 that meant that your annual mortgage insurance was going to go down $250 a year or roughly $20 a month," explained Hockaday.
Eager buyers were calling up realtors and brokers like Ira Wolff at F.C. Tucker.
“In my case we had a listing that was sold and we were asked by the buyer’s agent to delay the closing so that his buyer could take advantage of the reduction in the premium they would pay," said Wolff.
However, that reduction never came. The cut was suspended within hours of President Trump taking office.
"I’ve never seen anything like this before," said Hockaday.
She said her office alone has had to call around 200 clients and break the bad news.
“There could be a couple of stragglers out there where maybe that difference in the payment could be what makes them qualified or not qualified and that’s really unfortunate.”
If you are in the process of buying a home via a FHA loan, it is very important that you call your lender and find out what your new payment will be and if you'll be able to afford it.