FHA Mortgage Insurance

familyhome250.jpg

Buying a home with an FHA Loan? Putting less than twenty percent down? You will very likely be required to purchase FHA mortgage insurance.

What Is FHA Mortgage Insurance and Who Needs It?

Mortgage insurance in general is an insurance policy that protects home loan lenders against losses that result from defaults on home mortgages. FHA mortgage insurance protects lenders from losses in the event of a default by a borrower of an FHA loan.

You are more likely to qualify for an FHA loan than a non-FHA loan because FHA mortgages have flexible payment schedules and have more inclusive definitions of monthly income. And an FHA mortgage can help by reducing the up-front cash you need to purchase a home.

FHA mortgage insurance funds the FHA, and is paid for by you, the home buyer. If you are buying a house using an FHA loan and are making a down payment of less than 20 percent, you will very likely be required to purchase FHA mortgage insurance.

With an FHA loan, FHA mortgage insurance is charged to you each month at the rate of .5 percent per year of the total loan amount. You will also be charged an upfront mortgage insurance premium of 1.5 percent.

Your FHA mortgage insurance monthly premiums end approximately five years after signing the papers, or when the FHA mortgage balance is seventy-eight percent of the property value, whichever occurs last.

Related Articles

Source: Neighborhood Link
Search All Articles
Related Articles
How To Save On Closing Costs
HomecashsmMany are shocked when they learn how much they owe to close on their mortgage. But there are ways to save before you sign on th
What are the FHA Loan Requirements?
FhaThe FHA makes it easy to secure a home loan. The FHA Loan Requirements are described in detail in this article.
Homeowners Insurance
HomeinstTips on how to shop for homeowners insurance and save money-also avice on flood insurance
Asbestos
Asbestosdanger2_thAn information guide on asbestos and asbestos abatement. Also discusses vermiculite and how it relates to asbestos.

More...
Most Popular
Out! Out! Darn Spot!-Remove Oil Spots
Spot1_thHow to remove oil spots from concrete driveways.
Interest Only Mortgage
Housecalculator120Lower your monthly mortgage payments by paying only interest - at least for a little while.
What is The Greenhouse Effect?
GreenhousethumbThe greenhouse effect is the rise in temperature that the Earth experiences because certain gases in the atmosphere
What are Health Savings Accounts (HSAs)?
Gra-taxesthumbHealth Savings Accounts will change the way millions meet their health care needs

More...

Zip Code Profiler

Neighborhoods, Home Values, Schools, City & State Data, Sex Offender Lists, more.

Instant Home Value!