+1 vote
asked Jan 24, 2018 in FHA Loans by anonymous

2 Answers

+1 vote
Hello, and thank you for your question.

First, I want to clear something up, because your question is in the FHA Loans section, not the Conventional Loans section. PMI, or private mortgage insurance, applies to non-government loans with less than 20 percent equity or down payment. PMI companies are private insurers, and while lenders usually choose the insurer for you, I see no reason that you would not get to pick your insurer as long as the lender could establish the policy without going through a major hassle. You can always ask. As a loan officer, I worked with several mortgage insurance providers, and if a client had a preference among them I tried to honor it whenever possible.

FHA loans, on the other hand, require MIP, or mortgage insurance premiums. They are paid by borrowers, but the Department of Housing and Urban Development (HUD) administers the program. You don't get a choice with any government loan. The VA backs VA loans, and the USDA backs or funds USDA (rural housing) loans.
answered Jan 25, 2018 by GinaPogol (47,650 points)
0 votes
FHA has a flat one time upfront FHA Mortgage Insurance Premium of 1.75% which is normally rolled into the FHA Loan Balance. PLUS an annual 0.85% FHA mortgage insurance premium over the life of the 30 year FHA LOAN.  Whether your credit scores are 800 or 580, the 0.85% FHA MIP is fixed. With Conventional Loans, private mortgage insurance varies depending on the borrowers credit scores, LTV, type of property, location.

Gustan Cho NMLS 873293
The Gustan Cho Team at USA MORTGAGE
answered Feb 6, 2018 by GustanCho (106,540 points)
512 questions
654 answers
884 users