In this blog, we will discuss what LTV is, how it is calculated, and why it is so important in the mortgage lending process. LTV (Loan to Value) in Real Estate: The loan-to-value ratio is a measure of how much your home is worth compared to how much you want to borrow. This fi...
Current policy for 2022:Most borrowers who use FHA loans in 2017 will have to pay the annual mortgage insurance premium (MIP) for the life of the loan, or up to 30 years. This is the current policy for borrowers who put down less than 10%. For borrowers who choose the low 3.5% down...
FHA loans may offer homebuyers more flexible lending requirements and a lower down payment. Learn how to get an FHA loan, the pros and cons and how to qualify.
Unlike PMI, MIP lasts for the entire life of 30-year FHA loans. Meanwhile, 15-year FHA loans require MIP that lasts for 11 years. While the down payment is affordable, this can make your mortgage more costly in the long-term. To eliminate MIP, many FHA loan borrowers considerrefinancing...
A loan-to-value (LTV) ratio divides your loan amount by the home’s value; 80% is a good LTV. Lenders use LTV to determine your loan amount, risk, insurance, and interest rate.
There are lending limits to FHA loans, and these vary by the area you live in. Lending limits are the maximum loan amount that the FHA will insure. Influenced by the Fannie Mae and Freddie Mac loan limits, they are calculated and updated annually. They also vary depending on the type of...
With an FHA loan, you’ll be required to pay mortgage insurance premiums (MIPs). This comes in two forms: an upfront MIP paid at closing that’s 1.75 percent of the loan amount, and an annual MIP added to your monthly mortgage payment. The annual MIP is based on the size of your ...
You can only use an FHA loan for your primary residence, so this is not a good option for vacation homes or investment properties. While FHA loans don’t require private mortgage insurance, they do require buyers to pay an upfront Mortgage Insurance Premium (MIP).⁷ ...
How Is the FHA UFMI Premium Calculated? The UFMI premium the FHA requires on a mortgage is 1.75% of the loan amount.2So, if the initial loan is $300,000, 1.75% of that amount would be $5,250. The mortgage amount would thus become $305,250 with the UFMI premium included. Can th...
FHA loans require a lower minimum down payment and credit scores than many conventional loans. FHA loans allow an initial LTV ratio of up to 96.5%, but they require amortgage insurance premium (MIP)that lasts for as long as you have that loan (no matter how low the LTV ratio eventually ...