FHA Mortgage Insurance Costs

FHA requires a mortgage insurance premium (MIP) for its home buying programs. An up front premium of 1.50% of the loan amount is paid at closing and can be financed into the mortgage amount. In addition, there is a monthly MIP amount included in the PITI. Condos do not require up front MIP – only monthly MIP.

The mortgage insurance premium paid on an FHA loan is always significantly higher than on a conventional program. On an FHA loan the borrower will be charged a mortgage insurance premium equal to 1.50% of the purchase price of the property and a renewal premium of .500% in subsequent years. By contrast, the mortgage insurance premium charged at closing on a conventional program is as low as .500% (with 10% down payment) with renewal rate as low as .300% in subsequent years.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Scroll to Top