FHA Mortgage Insurance Or PMI
One of our defaults in the FHA mortgage calculator is the FHA vs. Conventional comparison.
There’s a substantial difference when you run this comparison at 640 FICO vs. 740 FICO. Using good credit will get the lowest PMI rates without changing the FHA figures.
Current mortgage rates have been generally trending towards the conventional rate being about .25% higher than the FHA rate. This is by no means a rate quote for your particular loan, but this runs a pretty good FHA vs. Conventional comparison using 5.0% and 5.25% for the two loans.
Using a $200k home and a $190k loan, we find that the FHA loan is about $32/month less. Over a 10 year time period, the FHA would be about $6,500 less expensive.
Because of the UFMIP on the FHA loan, it is more expensive in the first few years until the lower rate and lower MI off-set that intial expense.
Assumptions
These are the values used in this loan comparison. To update any values, go here
| Comparison Term (Years): | 10 |
| Property Value: | $200,000.00 |
| FICO: | 720 |
| Input | FHA | Conv |
|---|---|---|
| Loan Type | FHA | Conv |
| Loan Term (Years): | 30 | 30 |
| Loan Amount: | $190,000.00 | $190,000.00 |
| Interest Rate: | 5.00% | 5.250% |
| UFMIP: | 1.00% | 0.00% |
| MI Factor: | 0.850% | 0.940% |
| Closing Costs ($): | $0.00 | $0.00 |
| Closing Costs (%): | 0.00% | 0.00% |
Monthly Analysis
Based on the information provided, this table shows the monthly payments for principal, interest, and mortgage insurance
(if applicable).
| Loan & Payment Summary | FHA | Conv |
|---|---|---|
| P&I Payment | $1,073.64 | $1,104.41 |
| Mortgage Insurance | $135.93 | $148.83 |
| Monthly Payment | $1,166.09 | $1,198.02 |
| Monthly Savings | $31.93 | $0.00 |
| Total Loan Amount: | $200,000.00 | $200,000.00 |
Full Mortgage Analysis
Over the comparison term of 10 years, this table reviews the true cost of the loan over time in a way that monthly payments cannot. We remove the principal portions of payments to isolate the cost of interest, mortgage insurance, and any closing costs to calculate the total cost over time.
| Real Cost Analysis | FHA | Conv |
|---|---|---|
| Total Payments | $136,819.28 | $143,662.44 |
| Principal Payments | $35,804.58 | $34,298.27 |
| Interest & MI Payments | $101,014.00 | $109,364.00 |
| Remaining Balance | $156,095.42 | $155,701.73 |
| Total Cost | $102,914.00 | $109,364.00 |
| Total Savings | $6,450.00 | $0.00 |
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