Nevada Real Estate >> Las Vegas Real Estate Specialist: California: Carmel Valley

How to calculate FHA monthly MI payment

calculatorHow we calculate mortgage insurance (MI) on FHA loans to figure out a monthly MI payment. 

 

What exactly is PMI or MI?  You can view PMI a simple explanation for more clarification.

 

What you will need:

A standard calculator

A piece of paper/pen

A little patience

An understanding of MI factor 

An understanding of UFMIP


Here is the formula - 

Loan amount multiplied by to monthly MI factor divided by 12 equals your monthly MI payment.

MI factor is the number used to calculate the sum.  FHA rules change but as of now these are the guidelines.

If you have a down payment less than 5% then your monthly MI factor is 1.15   If you have 5% or greater down payment your monthly MI factor is 1.10

UFMIP is a one time payment to FHA. It stands for Up Front Mortgage Insurance Premium.  Easy way to think of it is similar to buying or leasing a car.  You put a down payment and then have monthly payments. UFMIP is equal to 1% of the loan amount.

Hypothetical scenario:

Purchase price $300,000 - 3.5% down payment ($10,500) = $289,500 loan amount

Apply UFMIP - Loan amount $289,500 X 1% (2,895) = $292,395.  This is your new loan amount. 

Base loan amount - $289,500 X 1.15 = 3,329.25.  Divide by 12 = $277.44

The monthly FHA MI payment in this scenario would be $277.44 per month.

If the down payment is 5% or greater then use 1.10 instead of1.15

 

Feel free to contact us with any mortgage related questions.

How to Shop Mortgage Rates

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North County

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New Office!

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Nevin Williams NMLS #69651

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4 comments • Nevin Williams, San Diego's best mortgage pro! • May 15 2011 11:19PM

Current mortgage rate trends May 2, 2011 mortgages san diego

Current mortgage rate trends remained flat today.  With all of the news regarding Osama Bin Laden the markets were mixed.  Initially there was jubilation about destroying Al Qaeda followed by concerns of retaliation.  All in all not much happened in the way of mortgage rates.

mortgage rate trends

With the economy showing signs of improving, now is a great time to take advantage of low mortgage rates and low housing prices.  It won't be long when 6% or 7% is average and houses cost 15% more than they do now.  Many will kick themselves for not taking advantage right now.

 

How to Shop Mortgage Rates

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follow me scubaskifish on Twitter

 

 

 

North County

*1902 Wright St 2nd floor Carlsbad CA 92008

New Office!

5360 Jackson Drive #220 La Mesa CA 91942

Nevin Williams NMLS #69651

*Not a licensed office location

EHO

 

Fast - efficient - competitive


www.SanDiegoHomeAndLoan.Info

2 comments • Nevin Williams, San Diego's best mortgage pro! • May 03 2011 12:20AM

How to buy and sell a home when mortgage rates jump

Rates rise With rates at historic lows all seems well in the mortgage world - However at some point these rates will go up.  What will you do with your home purchase or sale when this happens?  If you don't already have Plan B, here are some options:

Temporary buy down

A temporary buydown or 2/1 buydown is when a fee is payed to a lender in exchange for a lower initial rate.  This can be done with a 30 year fixed rate mortgage. 

Often times in a buyers market an agent will request that the seller help cover closing costs for the buyer.  The temporary buydown can also be included (make sure seller contibutions do not exceed lender guidelines).  The lower rate is temporary.

Shorter fixed rate terms: 

It is a statistical fact that homeowners refinance their mortgages for various reasons about every seven years.  Even those with low rates inevitably run into unexpected financial complications at some point in their lives and are forced to use the equity in their home.

Although I usually recommend a 30 year fixed rate because of the consistent and predictable payment there are some cases where a five or seven year fixed rate loan is a better option.  In most cases (not always) the rates on shorter fixed term loans are lower than 30 year fixed rate terms.

Pay discount points:

A discount point is a fee paid in exchange for a rate lower than the "par" rate available on a lenders rate sheet.  Par rate means the rate offered with no additional compensation. Unlike a temporary buydown this rate reduction is permanent for the duration of the fixed period.  If it is a 30 year fixed rate loan then the lower rate would be in effect for 30 years.

Shorter lock period:

A 45 day lock period will cost a buyer more money or a higher rate than a 15 day lock period.  If you choose to use this option make sure you can close within this time frame.  Unfortunately this will usually only work for those who are nearing the end of a loan process.  It is a bit of a gamble but if you and your buyer are willing to accept market risk it could work to your favor. Need more info on these products?

How to Shop Mortgage Rates

View this in 1080 HD  by clicking next to "CC" at bottom

 

 

 

 

 

follow me scubaskifish on Twitter

 

 

 

North County

*1902 Wright St 2nd floor Carlsbad CA 92008

New Office!

5360 Jackson Drive #220 La Mesa CA 91942

Nevin Williams NMLS #69651

*Not a licensed office location

EHO

 

Fast - efficient - competitive


www.SanDiegoHomeAndLoan.Info

1 comment • Nevin Williams, San Diego's best mortgage pro! • April 10 2011 09:50PM

FRAUD. What an ugly word.

elderly coupleIndeed FRAUD is an ugly word and most people would steer clear from it if they know what to look for. Mortgage and real estate fraud schemes are clever and many unsuspecting people looking for help get roped in.

Elderly looking to get cash flow from a reverse mortgage, short sale fraud,  people getting money from others for down payment and not disclosing it to the lender or people buying homes for unqualified borrowers. 

Some of these schemes to an average everyday citizen may seem harmless but they aren't.   Arm yourself,your  family, friends and your clients with the facts.  Here is a guide from Fannie Mae about popular fraud schemes, red flags for detecting fraud schemes and what to do.  Remember if it sounds too good to be true it probably is.

 

 

 

 

 

 

 

follow me scubaskifish on Twitter

 

 

 

North County

*1902 Wright St 2nd floor Carlsbad CA 92008

New Office!

5360 Jackson Drive #220 La Mesa CA 91942

Nevin Williams NMLS #69651

*Not a licensed office location

EHO

 

Fast - efficient - competitive


www.SanDiegoHomeAndLoan.Info

3 comments • Nevin Williams, San Diego's best mortgage pro! • February 23 2011 09:09PM