More Expensive Than Expected

FHA loans let many buyers get into a home with as little as 3.5% down. That’s a big help. But the mortgage insurance that comes with them can cost more over time than buyers expect.

Knowing how it works helps you choose the right loan and plan your exit.

Here’s the overview.

Two kinds of FHA premiums

FHA loans charge an up-front mortgage insurance premium, usually rolled into the loan, plus an annual premium paid monthly. With less than 10% down, the annual premium typically lasts for the life of the loan. With 10% or more down, it typically ends after 11 years. Rates and rules change, so check current terms with your lender.

Planning ahead

If you’ll stay only a few years, the long-term cost may matter less. If you’ll stay longer, many owners refinance into a conventional loan once they have enough equity, which can remove mortgage insurance. Buyers with strong credit and some savings should compare conventional options too.

Where to start

Ask a lender to compare FHA and conventional side by side. Read Money Down the Drain and VA Loans, then start with the buyer questionnaire.

This is general information, not financial, tax or legal advice. Talk with your lender, CPA or attorney about your situation.

A simple plan for your FHA mortgage insurance move

I’ve been helping people buy and sell homes across the west metro for about two decades, and I build and remodel luxury homes too. I’ll help you see both what a property is and what it could be.

Getting the house ready, or making it yours

If you’re selling and want repairs handled before buyers see them, Super Crew Contractors can give you an estimate. If you’re ready for something custom, Ivy Lane Homes does luxury home building and remodeling. And a quick coverage check with Intrinsic Insurance before closing can save you a surprise. For the local picture, read my Chaska homes guide or browse neighborhoods in Chanhassen and Victoria.

Your next step in FHA mortgage insurance

Every move is different. When you’re ready to talk about yours, I’m a call or text away.

Please note: I don’t handle rentals or property management. I work with buyers and sellers, and that’s where I can help you most in FHA mortgage insurance.

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