fha mortgage insurance

Similar to conventional home loans, FHA insured mortgages require mortgage insurance. The mortgage insurance, referred to as mutual mortgage insurance (MMI), charges 0.5% per year of the loan amount. In addition to the mutual mortgage insurance that is charged to the home owner each month, FHA charges an upfront mortgage insurance premium (MIP) of 1.50% for 30 year fixed rate mortgages. It is important to note that any unused portion of the upfront MIP may be refunded within the first 84 months of the loan.

Furthermore, the monthly mortgage insurance payment will automatically be cancelled when the outstanding principal balance reaches 78% of the original purchase price (provided that the monthly mortgage insurance payments have been made for a minimum of 5 years for 30 year loans). 15 year mortgages where the home buyer makes a down payment greater than 10% of the purchase price will not have to pay the monthly mortgage insurance.

The following is a table of the upfront MIP and monthly mortgage insurance percentages for FHA home loans:

For 30 year loans originated before January 1, 2001

Upfront MIP	Down Payment	Monthly MI
2.25%	4.99% or less	0.50%
2.25%	5% to 10%	0.50%
2.25%	10.01% or more	0.50%

For 30 year loans originated after January 1, 2001

Upfront MIP	Down Payment	Monthly MI
1.50%	4.99% or less	0.50%
1.50%	5% to 10%	0.50%
1.50%	10.01% or more	0.50%

For 15 year loans originated before January 1, 2001

Upfront MIP	Down Payment	Monthly MI
2.0%	4.99% or less	0.50%
2.0%	5% to 10%	0.50%
2.0%	10.01% or more	0.50%

For 15 year loans originated after January 1, 2001

Upfront MIP	Down Payment	Monthly MI
1.50%	4.99% or less	0.50%
1.50%	5% to 10%	0.50%
1.50%	10.01% or more	0%

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