Question by Nitz P: When do loans ( FHA and Conventional) require mortgage insurance?
I heard that all loans now require mortgage insurance. Which ones require and which ones do not? Please reply asap as I am trying to apply for a loan with a broker.
Best answer:
Answer by the kid
Usually if you have 80% or less Loan to Value (loan is 80% or less of the appraised value) you do not need PMI.
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FHA required upfront MIP no matter what, and monthly if over 15 year term. Conventional does not require if you are under 80% LTV.
VA does not- but does require a “funding fee” which may serve the same purpose. FHA charges a large one and since the loan is usually pretty high risk they need that insurance. Conventional conforming requires one on almost all loans that have less than 20% down. Non conforming loans have a whole set of their own rules.
The costs will be there one way or another unless you are putting a substantial amount down.