FHA loans with LTV over 95% have a monthly MIP rate of .55 vs .50 for loans with LTV 95% and lower from what I understand.
Depending on the loan, financing the upfront MIP could put the LTV over 95% unless it is not factored in. Important to know then how FHA LTV is actually calculated.
lenders use the base loan amount to determine the LTV - the borrower must put 3.5% into the loan. So the base loan amount on a 100,000 dollar house would be 96,500 and the LTV would be 96.5%. The MI premium would be calculated at 2.25% of the base loan amount and added to it create the amount financed. 2.25% is 2171$ so the amount financed would be 98,671 and the monthly payment would be calculated on that total. the .55 or .50 is used to calculate the monthly MI payment. The borrower can put more down of course..
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rmcvanguard
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Comments:
First part of answer says it is the base amount to determine LTV. I know that is what the upfront MIP is calculated on.
Are you saying that for the monthly MIP that has to be paid, you need to add in the 2.25% of UFMIP if it is financed to then determine the LTV which monthly MIP is calculated?
3 months ago by mrmillersr
the rate (.50 or .55) is based on the base ltv, the payment is based on the total amt financed multiplied times the factor divided by 12.
3 months ago by rmcvanguard
Still don't understand the answer as the second part conflicts with the first part. Can you provide an example?
3 months ago by mrmillersr
I said that wrong.. montly MI on the above example would be 96500*.0055/12 = 44.23/mo
3 months ago by rmcvanguard
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