 Do FHA Loans Carry PMI?
Most loans require private mortgage insurance (PMI) when your down payment is less than 20% of the sales price. On conventional loans, private mortgage insurance is provided by private companies. Whether private mortgage insurance is less than, equal to, or more than FHA loan insurance will depend upon the loan program and your qualifications. FHA Loan Mortgage Insurance is just considered Mortgage Insurance (MI), not Private Margate Insurance (PMI), because it is insured by the FHA, not a private company.
Do you have to buy mortgage insurance on an FHA loan?
Yes - as you will with most all of them. There is an up front mortgage insurance premium equal to 1.75% of the loan amount that is paid at settlement (1.5% for an FHA Streamline Refinance). This 1.75% fee can be financed into the total loan amount. In most cases, this mortgage insurance premium is included in your loan amount, so you are really paying it over the life of the loan. In addition, on loans with a term of greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home), you will pay an annual mortgage insurance premium of of the loan amount in monthly installments. View FHA Mortgage Insurance Rates.
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