Posted on: 10th Oct, 2010 01:13 pm
What exactly is FHA Mortgage Insurance and why it is required on a FHA Loan ?
Do you still need to pay PMI on a FHA Loan if you are paying Mortgage Insurance also ?
Thanks for your advice in this ?
Do you still need to pay PMI on a FHA Loan if you are paying Mortgage Insurance also ?
Thanks for your advice in this ?
Hi Guest,
PMI is required in case of conventional loans. As far as FHA mortgage is concerned, you will have to go for Mortgage Insurance. Mortgage insurance is a policy that protects lenders against the losses which results from defaults on home mortgages. Moreover, this is mainly required by those borrowers who make a down payment of less than 20%.
As a borrower, you'll have to pay .5% of mortgage insurance per year. This amount is charged to the homeowner each month. Along with this, FHA charges an upfront mortgage insurance premium of 1.5%.
Thanks
PMI is required in case of conventional loans. As far as FHA mortgage is concerned, you will have to go for Mortgage Insurance. Mortgage insurance is a policy that protects lenders against the losses which results from defaults on home mortgages. Moreover, this is mainly required by those borrowers who make a down payment of less than 20%.
As a borrower, you'll have to pay .5% of mortgage insurance per year. This amount is charged to the homeowner each month. Along with this, FHA charges an upfront mortgage insurance premium of 1.5%.
Thanks