2. Annual Mortgage Insurance Premium (FHA MIP)
Annual FHA MIP is a bit more confusing, and we won't bore you with minute details. Although, it's not terribly difficult to see how it
impacts your FHA mortgage payment.
FHA MIP is calculated annually, but you pay it monthly as part of your FHA mortgage payment.
The FHA MIP rate is determined by your loan term and down payment (see table below).
Consider the following from our UFMIP example:
- FHA MIP rate is 0.85% using the FHA MIP table.
- Converting annual FHA MIP to monthly is done by multiplying the annual rate times the average principal
balance over the next 12 months, backing out the UFMIP, and dividing the annual premium by 12.
That's the complicated part.
- The end result is an FHA MIP payment of $101.67.
- Fortunately, our FHA Payment Calculator does the work for you.