The FHA loan calculator here allows you to calculate the important variables involved in your mortgages that are FHA insured. Be it the Upfront MIP or down payment or even your monthly payments, this FHA loan calculator will give you everything you need.
The FHA loans can be referred to as the mortgages that have FHA insurance cover. FHA is, probably, the biggest insurance provider all over the world when it comes to mortgages. Established back in 1934, its aim is to create more and more homeowners in US. So, it is quite obvious that the reason why FHA loans are popular is that they allow for extending mortgages to just about anyone who’s looking to buy his/her own home. Remember, however, that FHA does not lend you any money. Rather, it insures lenders.
In order to qualify for the mortgage, FHA requires you to make single mortgage insurance payment upfront alongside annual insurance premiums. Upfront MIP remains the same i.e. 1.75% of total loan amounts. Besides, it is also possible to directly finance it into your mortgage loans as well. Keep it in mind that the mortgage insurance payment from the borrowers is mandatory for the protection of lenders against any potential losses in case of defaults. Annual MIP value can vary depending on loan amount, loan term and loan-to-value ratio.
Well, like different other mortgage options, here are some of the benefits that you get to enjoy with FHA loans.
. You don't need to make any major down payment. The FHA loans often require down payments that are anywhere around 3.5%. This factor alone can contribute greatly to the importance of FHA when it comes to supporting the realization of dreams for homeowners even for less-than-qualified households.
. There is no need of strong credit scores. In fact, the loans are approved by FHA for households having credit scores below 600.
. There aren't any prepayment penalties involved.
. There are no income expectations to be met. If the borrower can simply show that he she will be able to repay the mortgage - either through payment history or major savings - they can qualify even with lowest income.
. In some scenarios, the FHA borrowers can be able to spend anywhere around 57 percent of the income they make on their monthly debts. This is considered too high when compared to requirements for debt-to-income ratio associated with other mortgages.
These loans don't just give appealing incentives to the borrowers, but also to specific mortgage lenders as well. As they're federal entity which is upheld by the tax dollars, these loans can guarantee that remaining payments can be taken over when borrowers default.
Like other loan calculators, this FHA loan calculator also requires number of input values. To start with, you have to provide the home price and the down payment values. Down payment can be in percentage of the loan or it can also be a fixed amount as well. Other than that, you have to provide loan term, the rate of interest, upfront MIP, annual MIP and the annual MIP duration. Other than these, there are some option values as well which you can choose to enter if you want to. These include property taxes, home insurance, HOA fee, and any other costs that may be involved.
Once you have entered all the values, you can hit the calculate button so that the FHA loan calculator can perform the calculations. The result also shows you quite a lot of variables. The calculator calculates your monthly payment, loan amount combined with the upfront MIP, upfront MIP alone, down payment, total of your mortgage payments, and the total interest accrued. Well, this isn't all. The FHA loan calculator also provides you the some other details both monthly and their total for the term of your loan. These include the property tax, annual MIP, Home Insurance, HOA fee and any other costs that are involved according to the input that you had provided. In the end, you get the value for total out-of-pocket amount both monthly and for the entire term of your loan.
There is tabular representation of your beginning balance, interest, principal amount and ending balance as well. In fact, this gives you a more structured look at your mortgage.
So, use this FHA loan calculator for getting great insights into your mortgage loans that are insured by FHA. It will present you all the information that you’ll need and will definitely prove to be quite helpful.