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FHA MI vs. Conventional or Private Mortgage Insurance

FHA Monthly Mortgage Insurance is now 1.15% for most borrowers. It was only 0.55% prior to October of 2010; and it was 0.90% prior to today. Borrowers refinancing their FHA loans do NOT get to keep their old FHA MI rate.

Up Front MI remains at 1% of the loan amount. This is the fee that is paid only once when the loan funds.

Conventional or Private MI has NO Up Front fee, as most people know. And conventional or PMI is now a more popular alternative to FHA for strong borrowers. For borrowers with FICO’s over 720, MGIC’s rate is only 0.49% per year at a 95% LTV. If the score is below 720, however, MGIC’s rate jumps to 0.94% per year at a 95% LTV. These are for loans less than $417,000.

Because FHA’s rates tend to be lower than conventional rates, borrowers with low FICOs are usually better off with FHA financing despite the increase in FHA MI.

Call Jay Voorhees at (925) 855-4491

Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646