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Danny L Ours

Realtor, Colorado Springs Area

Federal Housing Administration (FHA) loans will be more attractive effective January 26, 2015.  The FHA’s 0.50% reduction in the Mortgage Insurance Premium (MIP) from 1.35% to 0.85% will result in a monthly payment savings or an increase in buying power.

Examples of savings are a buyer financing $260,000 after January 26 will save approximately $108 per month or $1,300 per year; and, a $125,000 loan will realize a saving of approximately $625 per year. 

Rather than reduce the monthly payment they qualify for, some buyers may choose to work with their lender to increase their buying power and apply the 0.50% monthly loan payment savings toward the purchase of a more expensive home with more space or amenities.