Why Is My Financed Loan Amount On My FHA Loan Bigger?

Buying or refinancing a home? An FHA loan much like a USDA loan, has two forms of mortgage insurance. There is an upfront mortgage insurance premium, UMFIP for short, which is based upon 1.75% of the base loan amount ( difference between the down payment amount or appraised value relative to equity) which is then added to the loan, creating the financed loan amount.

The financed loan amount is what the principal and interest payment is based off of as well is what the term of the loan is based off of. Additionally, there is a monthly factor typically about 1.3% of the loan amount before upfront mortgage insurance is factored in. So it’s important to remember when looking at FHA loans there is two forms of PMI, an upfront premium paid to HUD and then a monthly factor as well.

Planning to buy a home? If you have an FHA mortgage now, maybe refinancing might make more sense? Start today by getting a complimentary mortgage rate quote for an FHA loan or another mortgage type its online fast and free.


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  1. […] the lender considers this to be a less-risky property type. Modular homes can be financed with an FHA Insured Loan up to 96.5% financing and with a conventional loan up to 95%, for a borrower’s primary […]

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