Calculating FHA Mortgage Insurance

 

 

 

 

 

As of January 26th, 2015, FHA’s monthly mortgage insurance is .85% for loans with 5% or less down, and .80% with more than 5% down.

If a 15 year mortgage if chosen the mortgage insurance is .70% with 10% or less down and .45% with more than 10% down.

What does this mean for you?

For every $100,000 borrowed, an additional $70.83 will be added to your monthly payment with a down payment less than or equal to 5% (100,000 x .85% /12 = $70.83).

Under the new mortgage insurance rules (06/03/2013), the monthly mortgage insurance will last the life of the loan if the down payment is less than 10%. The mortgage insurance will cancel in 11 years if the down payment is greater than 10%.

There is also a 1.75% up front mortgage insurance (UFMIP) which is allowed to be financed in the loan. What this means to you is an additional $1,750 will be added to your loan for every $100,000 borrowed.

FHA loans are still one of your best financing alternatives. The minimum down payment is low (3.5%) and the rates are excellent!

*Calculations are based upon a 30 year amortization and loan to values >95%. Mortgage insurance will be lower on shorter terms and lower loan to values. Loans  over $625,500, 15 year mortgages, and certain Streamline refinances have different mortgage insurance calculations.