Once again housing got more affordable in the last week. Let me explain.

We all already know that mortgage rates are at historic lows, which has kept housing extremely affordable. Couple that with housing prices still remaining well below the peak high’s of 2006-2007.

Now there is one more thing that we can add to the mix…reduced MIP (mortgage insurance premiums) on FHA mortgages. Last week, President Obama announced that the Federal Housing Administration would be slashing the MIP premiums on FHA loans.

MIP is something that a homeowner must pay when they have less than 20% to put as a down payment on a property typically. MIP is essentially insurance against yourself. Insurance that if you stop paying on the loan the insurance company will pay out the lender so that they are not at a loss. This insurance protects the lender.

Anyone who has ever had MIP before knows it’s a drag. It feels like an expense that is worthless and is doing you nothing. Money that you could otherwise be saving, investing or doing something extra with your family.

Last week President Obama lowered the mortgage insurance premium for FHA loans from 1.35% a year to 0.5%. FHA loans only require 3.5% down and FICO scores as low as 600. You can also get an FHA loan 2 years out from a short sale or a foreclosure.

Now, the difference between 1.35% and 0.5% may not seem like much until you put a loan amount to it. Check this out. If you have a $250,000 mortgage, and now are only paying 0.5% instead of the previous 1.35%, you will save over $1200/year. That’s $100 per month!

Some of you may be saying…why are you making such a big deal about this Andy, $100/month isn’t that much. Well it’s a big deal for a few reasons.

First, although $100/month may not be much to you, it can be huge difference for someone who was not quite able to qualify for an FHA loan before. This means that for those of you that are flipping and wholesaling houses your buyer pool should be opening up much larger very soon. That is GREAT news!

Secondly, I know some of you that are subscribers to my newsletter have wanted to be able to buy a home for yourselves for some time. Money has been tight. Credit took a hit when you had to walk from your last home that was underwater. You have been renting. The idea of homeownership to you again has seemed far away.

Well, now could be your time. It is still a GREAT time to buy a home. Mortgage rates are still at ridiculously low levels. Housing prices are still at historic lows in most of the country. And, now you can have a substantially reduced MIP payment on an FHA loan with a credit score as low as 600.

So, whether you are someone who is looking to get back into homeownership…OR you are an investor that wholesales or flips this is TREMENDOUS news! In fact it is GREAT news for all of us.

This is just one more reason that I believe will drive prices higher very soon. Don’t waste a minute…go get yourself that house, go flip a house or at bare minimum go wholesale a deal and gets some money in your pocket today. Happy hunting!