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.
- 8 years agoBest 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 @ firstname.lastname@example.org 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.
- Go with the flowLv 78 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.
- Anonymous8 years ago
Your FHA insurance is PMI.