FHA Mortgage Insurance Explained: MIP, UFMIP, Mortgage insurance,

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FHA Guidelines

FHA Mortgage Insurance Guidelines

FHA requires mortgage insurance on all of their loans. There are two parts to the mortgage insurance required on an FHA mortgage loan. The first part is the upfront mortgage insurance premium. The amount charged on a purchase loan will be 1.75% of the loan amount on 30 year fixed rate loans. This amount is financed into the new loan amount in most cases. If the borrower pays off the loan within the first 84 months, a portion of the insurance is refunded back to them. The second portion required is the FHA monthly mortgage insurance. This is charged as 0.55% annually and due monthly along with the borrowers regular mortgage payment. The payment calculation for the monthly mortgage insurance is as follows: Loan amount times .0055 divided by 12.

On October 1st, 2008 the FHA mortgage insurance will be as follows:

Up Front MIP

1.75% - Purchases and Qualifying Refinances

1.5% - Streamlined Refinances

3.0% - FHA Secure (Delinquent Borrowers)

Annual MIP

0.55% - over 90% LTV > 15 year term

0.50% - less than or equal to 90% LTV > 15 year term

On any loans originated after January 1, 2001, the monthly mortgage insurance payment will automatically be cancelled once the loan-to-value (LTV) drops to 78% of the original purchase price and providing that the borrower has paid the monthly insurance payment for a minimum of 5 years.

Borrowers that have an FHA 15 year mortgage and have a down payment of more that 10% are not required to have the monthly mortgage insurance, however, the upfront mortgage insurance is still required.

Please note: The above information is just an overview of the FHA borrower eligibility guidelines used for underwriting an FHA mortgage loan, there may be other restrictions or guidelines that are not stated above. If you would like to discuss your personal situation, please E-mail or call us at 818-920-1600.

FHA Mortgage Insurance Facts

Mortgage insurance is required on all FHA loan programs.
The monthly mortgage insurance will cancel once the LTV is 78% and the borrower has paid for a minimum of 5 years.
15 year mortgage programs only require the upfront MIP if there is a minimum of a 10% down payment.

Please feel free to call us at 818-920-1600 to discuss your loan scenario or to be pre-approved for a FHA home loan, click here

Get Pre-Approved Today

To start the process of being pre-approved for a FHA home loan, complete the short application to the right and we will contact you within 24 hours to go over your loan scenario.

To speak to a loan officer today, please feel free to call us at 818-920-1600 or you can email us at

info@yourmtglender.com

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