1. What is FHA Mortgage with PMI?

FHA (Federal Housing Administration) loans are government-backed mortgages that require Private Mortgage Insurance (PMI) regardless of down payment amount. This calculator helps estimate the total monthly payment including both principal/interest and PMI.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula plus PMI:

Where:

• \( Principal \) — Loan amount in dollars
• \( Rate \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Loan term in months
• \( PMI \) — Monthly Private Mortgage Insurance cost

Explanation: The formula calculates the principal and interest payment, then adds the fixed PMI amount.

3. Importance of PMI in FHA Loans

Details: FHA loans require both an upfront mortgage insurance premium (UFMIP) and annual MIP (similar to PMI) that lasts for the life of the loan in most cases. This calculator includes the monthly portion.

4. Using the Calculator

Tips: Enter loan amount in dollars, monthly interest rate as a percentage (e.g., 0.5 for 0.5%), loan term in months (e.g., 360 for 30 years), and monthly PMI cost in dollars.

5. Frequently Asked Questions (FAQ)

Q1: How is FHA PMI different from conventional PMI?
A: FHA calls it MIP (Mortgage Insurance Premium) rather than PMI, and it's required for the life of the loan in most cases, unlike conventional loans where PMI can be removed.

Q2: What's the typical PMI rate for FHA loans?
A: Current annual MIP rates range from 0.45% to 1.05% of the loan amount, divided into monthly payments.

Q3: Can I avoid PMI on an FHA loan?
A: No, all FHA loans require mortgage insurance regardless of down payment amount.

Q4: How does loan term affect payments?
A: Shorter terms (15 years vs 30 years) typically have higher monthly payments but lower interest costs overall.

Q5: Are property taxes and insurance included?
A: No, this calculator shows principal, interest, and PMI only. Your actual payment may include escrow for taxes and insurance.