1. What is an FHA Mortgage Calculator?

Definition: This calculator estimates the monthly payment for an FHA loan, including the mortgage insurance premium (MIP).

Purpose: It helps homebuyers understand their potential monthly payments when using an FHA-insured mortgage.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M \) — Monthly payment (USD)
• \( P \) — Loan principal (USD)
• \( MIP \) — Mortgage insurance premium (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of payments (loan term in years × 12)

Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan (including MIP) over its term.

3. Importance of FHA Payment Calculation

Details: Accurate payment estimation helps borrowers budget effectively and understand the full cost of an FHA loan, including mandatory mortgage insurance.

4. Using the Calculator

Tips: Enter the loan amount, MIP (typically 1.75% of loan amount), annual interest rate, and loan term (usually 15 or 30 years). All values must be > 0 except MIP which can be 0.

5. Frequently Asked Questions (FAQ)

Q1: What is MIP in an FHA loan?
A: Mortgage Insurance Premium is an upfront and annual fee required by FHA loans to protect lenders against default.

Q2: How is MIP calculated?
A: Upfront MIP is typically 1.75% of the loan amount. Annual MIP varies but is usually 0.45%-1.05% of the loan amount.

Q3: Can I avoid MIP on an FHA loan?
A: No, all FHA loans require mortgage insurance regardless of down payment amount.

Q4: What's the difference between FHA and conventional loans?
A: FHA loans have lower down payment requirements (3.5%) but require MIP, while conventional loans may have higher down payments but can avoid PMI with 20% equity.

Q5: How long do I pay MIP?
A: For loans with >10% down, MIP lasts 11 years. For loans with <10% down, MIP lasts the entire loan term.