Home Buying in Philadelphia>Question Details

Aevans, Home Buyer in West Chester, PA

PMI (Mortgage Insurance) with a FHA loan?

Asked by Aevans, West Chester, PA Sun May 10, 2009

Can someone please explain the specifics of what a PMI (motgage insurance-I think) is when you purchase a home with a FHA LOAN? How long do you pay this?

Do you have to pay this with a conventional loan?

Alfina

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Hi Aevans,
With FHA you have an upfront Mortgage Insurance Premium charge that is usually financed into your loan. Then you will have monthly mortgage insurance which I believe is now for 3 years. This insurance protects the lender in case of default. While it used to be that the monthly insurance required was only if you didn't have 20% down, I believe anyone who uses FHA now has to have it, but I could be wrong.
With conventional loans, anytime you have less than 20% down you will have PMI.
I recommend that you speak to your mortgage specialist for a comprehensive overview of how mortgage insurance works. But in the meantime, I hope this helps.

All my best,
Micki
0 votes Thank Flag Link Sun May 10, 2009
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