Most FHA borrowers choose the 30-year loan option and put down 3.5%.
Both premiums can be “rolled” into the loan and paid monthly.
So, while FHA does not require PMI (a private mortgage insurance product), they do require borrowers to pay two different types of premiums — the upfront and annual MIP.
How do you get rid of PMI on FHA loan?
If you currently pay PMI or MIP mortgage insurance, you can get rid of it by refinancing once your home reaches 20% equity. If you’re shopping for a new home loan, look for options that allow no PMI even without 20% down.
How long do you pay PMI on FHA loan?
Mortgage insurance premiums are a way for the FHA to provide home loans to those who can’t afford large down payments, and the length of time you pay them depends upon how much you put down. For some loans, PMI is paid for around 11 years, but some may require payment over the life of the loan.
What is the cost of PMI on an FHA loan?
The upfront mortgage insurance premium costs 1.75% of your loan amount.
FHA MIP Chart.
|FHA MIP Chart for Loans Less Than or Equal to 15 Years|
|Base Loan Amount||LTV||Annual MIP|
|>$625,500||78.01% – 90.00%||0.70%|
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Why do I have to pay PMI on FHA?
FHA Mortgage Insurance Premium (MIP), like PMI, is an additional fee you pay to protect the lender’s financial interests in case you default on your loan. FHA borrowers are required to pay two FHA mortgage insurance premiums — upfront at closing, and annually for as long as you repay your FHA loan, in most cases.