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Will my fha mortgage insurance go down if my down payment is bigger?

I can pay as much as 4% or a little more. Is this better than just putting down 3.5% for the fha pmi? If it has no effect on mortgage insurance I'll use the funds elsewhere by debcarihna7843657 from Decatur, Indiana. Sep 3rd 2014 Reply


Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,571 contributions

FHA mortgage insurance factor is essentially the same regardless of the size of your down payment. Conventional loan mortgage insurance can go down dramatically as the down payment gets bigger. The FHA minimum of 3.50%, versus 4.00% won't change the factor at all. You should try to come up with 5% down and go with a conventional loan. www.MNHomesAndLoans.com

Sep 4th 2014
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James Barath (JamesBarath)
#10 ranked lender in Indiana - 351 contributions

To be honest, the additional down payment would have marginal impact to your monthly payment. Therefore, you would be better served to keep the additional funds on hand for a rainy day. Good luck.

Sep 3rd 2014
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,228 contributions

Agree with James, an extra 0.5% will really make no difference in your PMI or payment. I'd hang onto the money. If you had 5% to put down there is a small change or you could try getting a conventional loan where the PMI cost is sometimes less. Good luck

Sep 3rd 2014
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Joel Asbury (Winterwood)
#45 ranked lender in Indiana - 34 contributions

The only way your mortgage insurance will go down is if you change your loan program to a 5% down Conventional mortgage. FHA mortgage insurance is currently at 1.75% - and will be for the life of your loan - whereas Conventional MI is much lower. Typically you would begin with between 0.55% to 0.85%. But, you would need to put down an extra 1% to get to a 5% down payment it sounds like. If you would like, I can help you determine if you qualify for a Conventional loan. It's almost always the best program out there, but as with all loans, you have to qualify first. Hope this helps. I may be located physically in the Indianapolis area, but I have worked personally in the Decatur area before. If you would like to learn about no PMI programs, feel free to give me a call as well - as we have those available, too. Thanks!

Sep 3rd 2014
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