Posted on: 01st Aug, 2010 11:57 am
My agent told me you have to pay PMI for the life of the loan on all New FHA loans. Said it's a new FHA law. Even if you pay 20% down and even after you have had the loan for 7 years. Does anyone know if this is true?
Hi kendall,
In case of a FHA loan, you don't require to pay a down payment of 20%. You'll have to pay a down payment of 3.5% - 5%. The FHA requires a mortgage insurance premium (MIP) when you apply for a loan. An up front premium of 1.50% of the loan amount is paid at closing and can be financed into the mortgage amount. Apart from this, there is a MIP amount of .50% included in the monthly payments.
Thanks
In case of a FHA loan, you don't require to pay a down payment of 20%. You'll have to pay a down payment of 3.5% - 5%. The FHA requires a mortgage insurance premium (MIP) when you apply for a loan. An up front premium of 1.50% of the loan amount is paid at closing and can be financed into the mortgage amount. Apart from this, there is a MIP amount of .50% included in the monthly payments.
Thanks
Kendall- No that is not true.
James-FHA required down payment is 3.5% not 3.5 to 5.
UFMIP is 2.25%
Monthly is 0.55%
James-FHA required down payment is 3.5% not 3.5 to 5.
UFMIP is 2.25%
Monthly is 0.55%
See nothing that changes ML 00-38. 2010-02 dealt with UFMIP only. Don't forget to see 98-22 for correct method of calculation -- many LOs short cut if not connected to a LOS at the time
FHA payment of Monthly Insurance Premium (MIP)is not for the life of the loan. It is paid until the loan balance drops because of your monthly payments to 78% of the base loan amount (not the total loan amount that includes your Up Front Mortgage Insurance Premium)
Unlike conventional loans, you can not call up and cancel it due to increase value of the home over time as a result of appreciation.
You may call up and have it canceled earlier if you improve the property (add addition etc) and increase the value of the home.
If you put a small down payment of 3.5% to 5%, it will go away according to schedule sometime between 7 and ten years.
Unlike conventional loans, you can not call up and cancel it due to increase value of the home over time as a result of appreciation.
You may call up and have it canceled earlier if you improve the property (add addition etc) and increase the value of the home.
If you put a small down payment of 3.5% to 5%, it will go away according to schedule sometime between 7 and ten years.
