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An FHA loan's low down payment comes with mortgage insurance that generic calculators leave out. This one includes both the upfront and monthly premiums, plus Michigan property taxes, for the real payment.
Estimated monthly payment
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- Principal & interest
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- Monthly MIP
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- Property tax
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- Insurance
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- Upfront MIP (financed)
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Upfront MIP of 1.75% is financed into the loan. Annual MIP shown monthly. 30-year term.
Why FHA payments include two insurance charges
FHA insures the lender against loss, and it charges for that in two ways: a one-time upfront premium of 1.75% (rolled into the loan) and an annual premium of roughly 0.55%, billed monthly. That monthly MIP is why an FHA payment runs higher than the rate alone suggests — and at minimum down payment, it stays for the life of the loan.
The usual plan is to build 20% equity and refinance to a conventional loan to shed the insurance. Weigh FHA against conventional both ways in the payment calculator, and read the FHA loan guide for the full picture.
Frequently asked questions
How much is FHA mortgage insurance?
FHA charges two premiums: an upfront premium of 1.75% of the loan (usually financed in) and an annual premium — commonly around 0.55% of the balance — split into monthly payments. At the minimum 3.5% down, the annual premium lasts the life of the loan, which is FHA's main long-run cost.
What is the minimum down payment on an FHA loan?
3.5% with a 580 credit score, or 10% for scores between 500 and 579. On a $250,000 Michigan home that's $8,750 at 3.5% — and MSHDA's MI 10K DPA can cover most of it. See the first-time buyer guide.
When can I drop FHA mortgage insurance?
With less than 10% down, FHA's annual premium stays for the life of the loan — the standard exit is to build 20% equity and refinance into a conventional loan, which cancels insurance. With 10% or more down, the premium drops off after 11 years.