The mortgage insurance premium (MIP) calculator from the Federal Housing Administration (FHA) reliably shows the cost of mortgage insurance on an FHA-backed loan. Unlike other private mortgage insurance (PMI) plans, FHA uses an amortised premium, which means that the insurance premiums can fluctuate with the size of your loan. You can use the FHA loan calculator to see your total mortgage expenses, including MIP charges, for any time period you choose.
Input definitions for FHA loan calculator Texas:
- Purchase price: The price of the house you wish to buy
- Interest rate: The interest rate on the loan. As a starting point, we provide the average conforming 30-year fixed-rate mortgage (FRM) interest rate; this can be updated as required. The key factor used by the mortgage payment calculator to calculate your monthly payment and costs over time is the interest rate.
- Down payment: The calculator provides four popular options of 3.5%, 5%, 10% and 15% for comparison. The FHA program is known for its low down payment requirements, and when a borrower puts down 20% or more, PMI is not required for traditional mortgages, so there will be nothing to compare an FHA loan to. For the purpose of convenience, we calculate the downpayment dollar sum for you based on your purchase price input.
- Up-front Mortgage Insurance Premium: An upfront fee of 1.75 percent of the loan amount is required under the FHA program. This number, however, can be funded as part of the loan to help keep out-of-pocket costs down.
- Product Choice: The most common fixed-rate mortgage terms are 30, 20, 15, and 10 years; adjustable-rate mortgages typically have a total duration of 30 years, although the fixed interest rate period is much shorter, ranging from 1 to 10 years.
- Credit Rating: Although the FHA program does not use risk-based pricing, which raises rates for borrowers with poor credit, a borrower may be interested in using low down payment services.
- Time period of the loan: It is important to choose the time period of the loan to measure your mortgage insurance and loan payments.
- Expected annual home price appreciation: Apart from amortization, it is also important to mention the time when you will be able to cancel PMI for low- down payment programs. When you are unsure, you can leave a zero. The calculation would give you the number of months you should have paid down the loan to a sum that allows you to talk to your lender about cancelling your PMI policy.