The upfront fee is 2.25% which can be financed with your mortgage (even if it exceeds the cap) and there is a monthly renewal rate of .0050% (.0050 x loan amount divided by 12) added to your housing payment. There is no upfront fee if you're buying a condo, but the monthly still applies. At settlement, 2 months of the monthly renewal fee will be added to your costs as an escrow amount.

 FHA will probably not remove the MIP no matter how much equity you have in your property -- some say it runs out in the 22nd year of your loan. Also, if you sell within the first few years, you might get a refund -- don't bank on either!

The rates vary and you will need to check with your lender as to the upfront and monthly rates. For example: on a 5% down payment loan, the upfront could be .0095% of the loan amount which has to be paid at closing (if you have 10% or more down you may finance it with the mortgage), and the monthly renewal rate might be .0049% of the loan amount divided by 12. Many lenders today are NOT requiring upfront PMI. With no upfront fee, the rate is .0078% of the loan amount with 5% down payment and .0068% of the loan amount with 10% down payment. Again, 2 months of the monthly fee will be added to your closing costs at settlement as an escrow amount.

 However, once you have attained 20% equity (some lenders require you to have 25% equity -- check with your lender) in your property, you may be able to get the PMI removed from your loan. Keep an eye on those tax assessments every year as well as the balance of your loan -- if you think you have at least 20% equity, you need to contact your lender (THEY WON'T CALL YOU!) and ask them to remove the PMI. They will require you to get an appraisal (through their appraisers of course) which will cost you $300; however, if you're right, NO MORE PMI!
 

Call Us!

Landlords!