Do I need to pay a PMI if I have an FHA Loan?

I am looking at buying a multi-family home in florida. I talked to a real estate agent. I told him that I would be applying for an FHA loan. The agent started breaking down the numbers for me and he mentioned that I would have to pay a PMI. Why would I have to pay PMI if the FHA Loan is suppose to be insurance for the lender and I pay the annual premium? This is kinda confusing.. Thanks in advance.

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  • 8 years ago
    Best Answer

    All FHA loans have MIP, which is the same as PMI. An FHA loan is simply a federally insured loan that insures the lender for what's considered high-risk loans, meaning loans with higher loan to value ratios. Unless you're putting 20% down on any purchase...you're going to have to pay mortgage insurance. But I would research your options with a banker. FHA might not always be the best approach, it totally depends on your situation; how much you want to put down and your credit score. Sometimes PMI for a conventional loan is cheaper than paying MIP for an FHA loan. My advice would be to talk to a few different bankers (not brokers b/c they charge a fee). You can contact me if you like. I've been a National Mortgage banker for several years with a very successful national bank, doing FHA, VA, and conventional loans. But if not with me, shop around with anyone. You can email me @ holliwood031125@yahoo.com if you like. Sometimes people do on here and I always help them out with advice or even an offer, but at least I like to see what kind of deals people are getting, so you can compare apples to apples. Here is my company's website: www.nlcmortgageloans.com -Brian Hollingsworth **Good luck & happy hunting!**

    Source(s): I'm a licensed Senior National Mortgage Banker with a Fed chartered lender for 7+yrs, Mortgage Banker of the Year for two years in that time.
  • 8 years ago

    Even with a conventioanl loan (at least 10% down) you have to pay PMI.

    Only way to avoid PMI is to put 20% down.

    Could you do this?

    I prefer conventional loans since you don't have to go through all the hoopla of FHA.

  • 8 years ago

    If you do not have 80% equity at sale, they will require it, as will any lender. The FHA loan isn't insurance for the lender, it's just a type of loan. The PMI is the insruance.

  • Anonymous
    8 years ago

    Your FHA insurance is PMI.

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