Loans insured by the Federal Housing Administration, or FHA, require more calculations than any additional mortgage loan. They always require a mortgage insurance premium, or MIP, which is usually financed into the loan amount. After the down payment is subtracted That is figured. FHA loans also have a monthly MIP amount that’s added into the monthly payment. Many new buyers utilize FHA lending because of their 3.5 percent down payment requirement, even though borrowers with credit ratings under 580 are required to put 10% down.
Locate the correct purchase price of the home on your sales contract. For borrowers with a credit rating higher than 580, a minimal deposit of 3.5 percent is necessary, but more could be paidoff. By way of example, 3.5 percent of a $100,000 home would be $3,500. Taking down payment out of the $100,000 cost equals $96,500. This is your base loan amount.
Add 2.25 percent for the upfront mortgage insurance premium for your base loan amount of $96,500 for $98,671.25. This represents the new amount of the loan, though the amount of the loan would normally rounded down to $98,670. The 1.25 left over would be collected from the borrower at closing.
Calculate your monthly mortgage amount by multiplying your loan amount of $98,670 from .0055, which equals $542.69. This figure represents a yearly sum, so divide $542.69 from 12 for $45.22, which is added to your monthly payment.
Calculate your monthly payment by using mortgage factors, shown in the Resources. To compute the monthly payment for $98,670 to get a 30-year mortgage at an interest rate of 5%, go to the factor chart. These factors are put up for $1,000 for different terms. Multiply 98.67 from the factor 5.36822, that equals $529.68–your base monthly payment. If your earnings total $1,200 annually ($100 per month), along with your homeowners insurance prices $1,800 annually ($150 per month), add this $250 plus $45.22 (monthly MIP) into the $ $529.68 monthly payment, for a grand total monthly payment of $824.90.