FHA MORTGAGE FREQUENTLY ASKED QUESTIONS-Mortgage Insurance
On an FHA loan does the required Mortgage Insurance pay off my loan if I die? No, not this type. This mortgage insurance protects the lender/FHA in the case of default.
How Long do I have to keep mortgage insurance on an FHA loan.
FHA Monthly Mortgage Insurance Premium drops off after a minimum of 5 years and 78% of the original purchase price.
What if I pay extra toward my mortgage and pay it down to 78%? You will still be required to keep the mortgage insurance for at least 5 years. At that point it may make sense to look into refinancing to a conventional loan.
Is there a way to get a lower mortgage insurance premium?
If you can put at least 5-10% down and can afford the 15 year payment, it makes sense to look at a 15 year loan.
At 90% loan to value the monthly mortgage insurance on a 15 year loan would be .25% instead of 1.15%, This represents a significant savings to you. If over 90% on a 15 year would be .5% The interest rate on a 15 year is usually about 1/2% lower than 30 year loan.
How is the mortgage insurance paid?
The 1% up front mortgage insurance is typically financed into your mortgage. The monthly FHA Mortgage insurance is included in your regular monthly payment.
FHA MORTGAGE FAQ Mortgage Insurance
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