MIP cut benefits first-time, last-time buyers

President Obama recently announced that the Federal Housing Administration will reduce its annual mortgage insurance premiums (MIP) by 0.5 percentage points from 1.35 percent to 0.85, a move that will help first-time homebuyers.

This reduction will also help aging baby boomers to sell their homes to first-time buyers with more attractive mortgage terms.

A fact sheet released by the White House says the reduction in premiums will produce an average savings of $900 annually for all new FHA borrowers and that the lowered premiums will create opportunities for 250,000 new homeowners to purchase a home over the next three years