How to Calculate Mortgage Insurance on an FHA Loan
by Joey Campbell
A borrower must make two calculations for FHA's mortgage insurance.
The Federal Housing Administration (FHA) has always required mortgage insurance on the mortgage loans it insures. The purpose of the insurance is to protect the lender. If the borrower defaults on his loan, the lender can file a claim against FHA's insurance fund and recover losses from the foreclosure process and loss of the loan. There are two calculations for FHA's mortgage insurance: an upfront insurance premium that is usually financed, and a monthly premium.
Calculating FHA's Monthly Premium
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