This is an update to an earlier post reagarding FHA’s version of Mortgage Insurance (which is sometimes referred to as PMI).
As we mentioned, FHA mortgages have a one-time mortgage insurance premium, known as upfront mortgage insurance. The cost of this insurance has bounced around alot this year – and is NOW 2.25% of the loan.
This upfront fee is non-refundable. There’s also a monthly fee that’s based upon several things, but will generally run .55% of the loan amount. If you live in the property for more than 5 years, and you have a 20% equity gap – the monthly amount can be dropped just like with it’s conventional counter part – PMI.
The program is similar to the USDA and VA programs. Both of those loan programs have a type of mortgage insurance (called a Guarantee Fee), that’s non refundable. The biggest difference is that FHA also has a monthly fee collected.
The common belief that the monthly mortgage insurance on a FHA loan is very expensive is wrong. Unlike a Conventional Loan, no matter how much you put down, it’s either .55 percent of your base loan amount. When you compare this program to a Conventional Loan Program that requires PMI, you would need to put down at least 10% down in order to get to .52 percent.
These PMI amounts are accurate for Condos, 203k loans – or regular 203b FHA loans.
For more info – call Steve Thorne, Corporate Investors Mortgage Group, 919-649-5058 – FHA Mortgage Loan Specialist!












An upfront pmi charge on a mortgage 80%LTV and under is an affront.To add a monthly fee for 5 years is an insult.