Do ALL FHA loans require mortgage insurance?

Posted on Sep 30, 2012 in FHA Information

Question by nathan.pitchford: Do ALL FHA loans require mortgage insurance?
I’m looking into refinancing my home to get out of an adjustable rate and I’ve received two good faith estimates. Both for FHA loans. It’s a 95% loan and one company says they can get me the loan without mortgage insurance and the other says it’s a requirement.
Well I’m being assured that this FHA loan doesn’t have any PMI on it and it’s 95%. I even referenced the fhaloan.com site and he said he is 100% sure no MI. Any ideas?

Best answer:

Answer by Mortgageman
The loan will have mortgage insurance. You can take a higher interest rate and have the lender pay it up front. Or you can add it to your loan amount and finance it over the life of the loan. Or you can pay it monthly with your mortgage payment and petition to have it removed once you think you have 20% equity.

Know better? Leave your own answer in the comments!

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8 Comments

  1. Yes all FHA loans have mortgage insurance.

  2. FHA loan ALWAYS have FHA mortgage insurance. That insurance is the basis for lender’s claims against loss should the borrower default. A percentage of any subsequent loss is paid by the FHA to the lender and is why lenders will make loans to borrowers who may not qualify for conventional financing but can qualify for FHA financing which is a bit less stingent.

    There is an initiala premium that is financed as a part of the loan amount and monthly renewal payments that are included in the required monthly remittance

  3. All fha loans over 80% loan to value require PMI.there are other loans available over 80%loan to value that do not require PMI, but they generaly carry a higher rate than FHA.

  4. Yes. depending on your state and who’s doing the MI. Usually, .90 of what the loan amount is and divide 12 months. You can save yourself from the MI by splitting the loan into two. Which could save more money on the payment. No MI option on that kind of LTV results to higher rate.

  5. First off, don’t mess with the scam artists who spam Yahoo! Answers with offers of help. If they can’t even read and abide by the community guidelines here, why would you trust them with tens or hundreds of thousands of $ $ $ in debt?

    FHA loans ALWAYS have insurance on them. It’s not called PMI and unlike PMI cannot be removed from the loan regardless of the loan to value ratio. Part of the costs on an FHA loan is a premium for the insurance, called a Mortgage Insurance Premium or MIP. This is often rolled into the loan principal or can be paid in cash at closing.

  6. My sister had a FHA Mortgage and the price of insurance was 1.5% the purchase price of the home, which was simply rolled into the mortgage at settlement.

    Sounds like the other mortgage broker is not offering a FHA Mortgage.

  7. Nice article on lending! It was well worded and informative.

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