|FREQUENTLY ASKED QUESTIONS
Q: How much do I have to put down on a home purchase?
A: Minimum 3% - mortgage insurance required. 20% or more avoids MI payments.
Q: What is difference between mortgage insurance and hazard insurance?
A: Mortgage insurance protects the lender in case of a mortgage loan default.
A: Hazard insurance covers fire, theft, vandalism, hail, and other optional coverages.
A: Hazard insurance is also known as HOI (Homeowners Insurance).
Q: What is Mortgage Insurance Premium (MIP)?
A: It is a premium required for all FHA loans. Premium is 1.75% of loan amount.
A: This 1.75% can be financed into your loan. Does not count toward FHA loan limits.
Q: What is LTV?
A: Loan-to-Value ratios (loan amount to value of your home).
Q: Do mortgage insurance payments last for the life of mortgage loans?
A: Once mortgage balance falls below 80% of home's value, payments can be removed.
A: FHA requires annual MIP for 11 years for LTVs below 90%; if over 90%, life of loan.
A: Refinance FHA to conventional loan to remove MIP (78% or less LTV).
Q: Do Veterans Administration Loans require mortgage insurance?
A: No - but a 2% of loan funding fee may apply if Veteran is not disabled serviceman.
Q: What happens in a real estate sales transaction?
A: See Video Below