Understanding the fha loan calculator
FHA loans, insured by the Federal Housing Administration, let buyers put down as little as 3.5% and accept lower credit scores than conventional loans. The trade-off is mortgage insurance: an upfront premium of 1.75% of the loan (usually financed into the balance) plus an annual premium commonly 0.55% split into monthly payments.
Unlike conventional PMI, FHA annual MIP often lasts the life of the loan when you start with the minimum down payment, so many borrowers eventually refinance into a conventional loan once they have 20% equity. This estimate covers principal, interest, and MIP; your real payment will also include property taxes and homeowners insurance collected through escrow.
Results are estimates for education only and are not financial advice.