How to calculate MIP for FHA loan?

Asked by Robert Huguelet, Chicago, IL Tue Jan 28, 2014

I have seen a few different formulas depending on as-of date. Can anyone tell me or point towards an updated formula or calculator? Excel would be great...

I am trying to figure out how much I need to put down for my purchase to make sense while adding in MIP.

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Mark DeWitt, Mortgage Broker Or Lender, Carlsbad, Ca, CA
Mon Feb 3, 2014
Hi Bob.huguelet,

Elva hit it right on for the UFMIP. If you are also wondering about the monthly, you would want to multiply the loan amount by .0125 and divide by 12. The .0125 is the most common, but it can be more or less depending on the details of the transaction. I would suggest trying to come up with the extra 1.5% of down payment (total of 5%) and going conventional if you qualify. You will save yourself the 1.75% UFMIP and you can get a loan with a much smaller monthly MI payment, or no MI, or lender paid MI. I would suggest speaking with an experienced local mortgage banker and they should be able to run the calculation for you with a complete cost breakdown by loan amount and mortgage type.


Mark DeWitt
V.P. Branch Manager
HomeStreet Bank
(858) 212-7054 Direct
(760) 331-2063 Fax
NMLS #633211
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Elva Wormley, Mortgage Broker Or Lender, San Jose, CA
Tue Jan 28, 2014
Hi Bob,

If you're purchasing a home, the minimum required investment is 3.5% of the purchase price. The Upfront Mortgage Insurance Premium is 1.75% of the loan amount. The Upfront Mortgage Insurance Premium is usually financed, added to your loan amount. For example, if your purchase price is $300,000 the minimum down payment would be $10,500 ($300,000 x 3.5%). The base loan amount would be $289,500 and the total loan amount would be $294,566 ($289,500 x 1.75% = $5,066.25 added to the base loan amount).

So, to be clear, your minimum down payment amount is based on the purchase price. You can finance the Upfront Mortgage Insurance Premium or pay for it at closing.

Best regards,

Elva A. Wormley
Mortgage Consultant
Office (408) 615-8500
C2 Financial Corporation
2845 Moorpark Avenue, Suite 209
San Jose, CA 95128
NMLS #331981
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