Livermore, Pleasanton, Danville, Short Sale Specialist
  

Mortgage insurance is a must

Two mortgage insurance premiums are required on all FHA loans: The upfront premium is 1.75 percent of the loan amount and is paid when the borrower gets the loan but can be financed as part of the loan amount.

The second is the annual premium, which varies based on the length of the loan, the amount borrowed and the initial loan-to-value ratio (LTV). The current annual premiums for loans less than $625,500 are:

  • 15-year loan, LTV more than 90 percent: 0.7 percent
  • 15-year loan, LTV 90 percent or less: 0.45 percent
  • 30-year loan, LTV more than 95 percent: 1.35 percent
  • 30-year loan, LTV 95 percent or less: 1.3 percent

“The perception is that that sounds expensive,” Geist says.

However, he adds, borrowers need to compare the FHA-insured loan to a loan that’s not FHA-insured (and consequently requires a much larger down payment). In many cases, the FHA loan is still the best choice, he says.

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RE/MAX Accord Office Locations

 

RE/MAX Accord 1841 4th Street, Livermore CA 94550 925-373-7011

 

RE/MAX Accord 5950 StoneRidge Dr, Pleasanton CA 94588 925-373-7011

 

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