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
If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure!
If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest. Please contact me at 410-960-2061.