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FHA Mortgage Insurance
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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.

More On 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 has two components – an upfront mortgage insurance premium 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.

As of 2015, the upfront mortgage insurance is 1.75 percent of the base loan amount, and the annual premiums are shown in this table.

table showing mortgage insurance premiums