Glossary Terms

FHA Mortgage Insurance

FHA mortgage insurance protects lenders from losses in the event that borrowers default on their FHA mortgages. Without FHA insurance coverage, few lenders would be willing to fund home loans with minimal down payments to borrowers with low-to-moderate incomes or past credit problems.

FHA mortgage insurance protects lenders from losses in the event that borrowers default on their FHA mortgages. Without FHA insurance coverage, few lenders would be willing to fund home loans with minimal down payments to borrowers with low-to-moderate incomes or past credit problems.

FHA mortgage insurance has two components – an upfront mortgage insurance premium (FHA MIP) that can be financed or paid out-of-pocket, and an annual premium based on the loan balance. The annual premium is divided into 12 monthly installments and added to borrowers’ monthly payments.

The upfront mortgage insurance is 1.75 percent of the base loan amount, and the annual premiums are shown in these tables:

FHA MIP Chart for Loans Greater Than 15 Years
Base Loan Amount LTV Annual MIP
≤$625,500 ≤95.00% 0.80%
≤$625,500 >95.00% 0.85%
>$625,500 ≤95.00% 1.00%
>$625,500 >95.00% 1.05%

 

FHA MIP Chart for Loans Less Than or Equal to 15 Years
Base Loan Amount LTV Annual MIP
≤$625,500 ≤90.00% 0.45%
≤$625,500 >90.00% 0.70%
>$625,500 ≤78.00% 0.45%
>$625,500 78.01% – 90.00% 0.70%
>$625,500 >90.00% 0.95%