AboutRon Bauer Expertise Whether you have great credit or think you are the most credit challenged person on the planet I can help you with mortgage related questions about purchasing a home, investment property, refinancing, or doing some debt consolidation. I also specialize in helping those needing credit repair or creative financing when purchasing a home. Additionally I work with many second home and investment property buyers in a variety of States. My clientele is mainly west coast (California, Colorado, Nevada, Utah, Arizona...), but I lend in all 50 States and will do my best to answer any question you may have on any conventional, FHA or VA loans...
Experience Experience:
Sr. Residential Mortgage Lender of a National Bank specializing in "residential" mortgages including FHA/VA loans and investment property strategies. We process, underwrite, and fund in house for most of the big named companies and then some...
Expert: Ron Bauer Date: 7/2/2008 Subject: FHA re-fi and " insurance premiums"
Question hello Ron, so great to have your expertise available online like this! Thankyou!.. i am re-fi my first mortgage, currently @ 6.125% fixed 30yr. and my second mortgage @ 7.75% fixed into ONE mortgage @ 6.3% currently proposed by my lender Countrywide .... i am wondering how does the mortgage insurance premium i will have to pay w/ this FHA loan work ... does it add to your loan payment with out going toward your interest / principal... how ong do i have to pay this " loan insurance" .. is it worth it , just to lower my monthly payment[s] to one payment saving about $180.00 per month??? i have had my current loan structure[ 1st and 2nd] for about 3 years now and do plan to stay in my home...i owe about 284,000.00 on both loans at present and am looking at a new loan amount of $285,000.00 Thanks so much, Margaret
Answer Margaret,
Thank you for contacting me with your question. On all FHA loans there is a Mortgage Insurance Premium (MIP) that is financed into the loan amount and a monthly premium. There has been a few changes to this percentage based on Loan to Value and credit score recently, but basically is starts at around 1.5% (and upward) of the loan amount for MIP.
Based on $285,000 X 1.5% = $4,275 MIP would be included on top of the loan amount. Your payments would be based on the combined loan amount of $289,275.
There is the monthly mortgage insurance as well which typically for that loan amount is around $119 a month.
I did not see you mention it, but if your current pay off amount is $284,000 on both loans and your expected loan amount is $285,000 not including MIP, are you paying your closing costs outside of the loan?
