How to: Calculate FHA Mortgage Insurance Premiums
(Effective: October 1, 2008 through September 30, 2009)

The following tables are a reference to be used when calculating up-front and monthly mortgage insurance premiums for FHA loans:

Up-Front Mortgage Insurance Premiums (UF MIP):
Loan Type Rate
Purchase - 1.75%
Rate/Term Refinance (full qualifying) - 1.75%
Cash-Out Refinance - 1.75%
Streamline Refinance - 1.75%

Monthly Mortgage Insurance Premiums (MMI):
Loans for over 15 years
LTV - Rate
≤ 95% - .50%
> 95% - .55%
Loans for 15 years of less
LTV - Rate
≤ 90% - None
>90% - .25%


Example Calculation:
For the following example, we will use a $100,000 loan borrowed on a 30-year term used to purchase a home. Our loan to value ratio in this example is 97%:

Up-Front Mortgage Insurance Premium: $100,000 × 1.75% (.0175) = $1,750
This will be the amount that is added to the base FHA mortgage and financed into the loan.

Monthly Mortgage Insurance Premiums: $100,000 × .55% (.0055) = $550
$550 ÷ 12 = $45.83
This will be the amount that the borrower is responsible for paying as a part of the mortgage payment each month.

$8,000 Tax Credit Available to First Time Homebuyers

There has never been a better time to buy your first home! The Federal government is currently offering a tax credit of up to $8,000 for qualifying first-home purchases between January 1, 2009 and December 31, 2009.

Following are some of the restrictions for the tax credit:

~ The home purchase must occur between January 1, 2009 and December 31, 2009 and can be a new or resale home

~ Must be considered a first-time home purchase; a first-time homebuyer is defined as someone who has not owned a home during the 3 year period prior to the home purchase

~ The tax credit is for 10% of the home’s purchase price to a maximum of $8,000

~ The credit is reduced for borrowers with a Modified Adjusted Gross Income of $75,000 for single taxpayers and $150,000 for married taxpayers. The credit is eliminated for single taxpayers with a Modified Adjusted Gross Income of more than $95,000 and married taxpayers with a Modified Adjusted Gross Income of more than $170,000.

~ The homebuyer must use the home as a primary residence for at least 3 years

~ All principal residences are eligible including single family homes, condominiums, townhomes and manufactured homes

~ It is possible to take the tax credit early and apply it to your down payment or closing costs. It may also be possible to amend your 2008 tax return to reflect the credit. Consult a tax professional for more information on these options.

This is an overview of some of the restrictions of the current First Time Homebuyer Tax Credit.

*We ask that you please consult a tax professional prior to making a purchase decision.