How Much Is Your FHA Mortgage Payment?


April 28, 2023

FHA Home Loan

Are you new to house hunting?

If you have never applied for a home loan before it’s understandable that you might view a mortgage payment as a simple calculation involving the principal and interest multiplied by the number of mortgage payments you have to make.

But principal and interest are only two factors that influence how large your monthly mortgage obligation is.

FHA Mortgage Insurance Premiums and UpFront Mortgage Insurance Premiums

Your FHA mortgage insurance premiums can change how much you pay each month for the home loan.  Did you choose to finance the FHA Up-Front Mortgage Insurance Premium or UFMIP? If so, expect an increase in your monthly mortgage costs.

Property Taxes

Property taxes are part of owning a home, and once you get used to paying them it will seem like you’ve always paid these taxes.

But at the beginning of your home ownership journey, it is easy to overlook taxes as a factor in your total mortgage expenses. It’s smart to budget for taxes and anticipate rising property taxes down the line.

Escrow Payments

When you have a mortgage, you may pay those property taxes and related expenses using an escrow account.

Any expense or inconvenience related to using escrow may be worth it because you avoid late fees on payments you missed because life got in the way and your payments are late.

Homeowners Insurance

Homeowner’s insurance expenses are common but some are initially confused by the options between FHA Mortgage Insurance and Homeowner’s insurance.

They are not the same thing. Mortgage insurance protects the bank in case you default on the FHA mortgage. Homeowner’s insurance protects the house and its contents and is a tool for the borrower.

Homeowners Association Fees or Condominium Fee

Chances are good you may need to join a condo owner’s association or homeowner’s association when you buy a new home.

Homeowner associations and their condo equivalents may require you to pay dues or fees for the upkeep of common areas.

Your HOA rules, bylaws, and dues are not standardized, the fees will vary depending on the association, and all such organizations have their own unique requirements.

Know the costs before you commit, but also know the bylaws and covenants as they may have specific guidelines to be followed not found in similar agreements offered by other associations.

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