FHA Mortgage Insurance

Here is some important information regarding the FHA program. First, FHA is an insurance program to help home owners get into homes. There are two types of insurance. UpFront Mortgage Insurance (MI) and Monthly Mortgage insurance(MMI) are the two types. The UpFront MI is 2.25% of the loan amount. The MMI or monthly is .55% divided by 12 to get your monthly MI payment. This payment directly impacts your monthly payment as well as how much you can qualify for. The UpFront MI is disclosed on your Good Faith Estimate (GFE), which can be confusing because it is rolled into your loan amount. The UpFront MI is additional insurance to protect the lender against defaults.

Why do you need to know this? It is important to educate yourself on what fees will be disclosed but also how that impacts your payment and qualification. If you buy a $100,000 house, and put $3,500 down per the FHA down payment requirement and calculate your payment from that you would be wrong. You need to make sure when you are being quoted payments that you are being quoted off of the loan amount plus the UpFront MI that will be rolled into the loan amount. This confuses many people and if you contact me directly I can walk you through it and make sure you understand. The total loan would actually be 98,671 not 96,500. If these calculations aren't done right and you are given all the information upfront accurately you can find yourself disqualified or thinking your payment is less than it is.

Let an expert help you through this process. Start today.www.ApproveMeFHA.com