FHA Loan Calculator With Purchase Price And Amount

FHA Loan Calculation:

\[ Monthly\ Payment = P \times \frac{r(1+r)^n}{(1+r)^n-1} \] \[ Where\ P = Loan\ Amount,\ r = Monthly\ Rate,\ n = Term\ in\ Months \]

Purchase Price:

Down Payment (%):

Interest Rate:

Loan Term:

Loan Amount:

Base Monthly Payment:

Monthly MIP:

Total Monthly Payment:

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1. What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration, designed to help lower-income and first-time homebuyers qualify for financing with lower down payments (as low as 3.5%) and more flexible credit requirements than conventional loans.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula with FHA-specific adjustments:

\[ Monthly\ Payment = P \times \frac{r(1+r)^n}{(1+r)^n-1} + MIP \]

Where:

$ P $ — Loan amount (Purchase price minus down payment)
$ r $ — Monthly interest rate (Annual rate ÷ 12)
$ n $ — Loan term in months (Years × 12)
$ MIP $ — Monthly mortgage insurance premium

3. Understanding FHA Loan Costs

Details: FHA loans require both an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount and an annual MIP of 0.85% (divided into monthly payments). These premiums protect lenders against borrower default.

4. Using the Calculator

Tips: Enter the home purchase price, down payment percentage (minimum 3.5%), current interest rate, and loan term. The calculator will show your estimated monthly payments including principal, interest, and mortgage insurance.

5. Frequently Asked Questions (FAQ)

Q1: What's the minimum down payment for FHA?
A: 3.5% for credit scores of 580+. Borrowers with scores between 500-579 need 10% down.

Q2: How long do I pay FHA mortgage insurance?
A: For the entire loan term if putting less than 10% down, or 11 years if putting 10% or more.

Q3: What are FHA loan limits?
A: Limits vary by county and property type, typically ranging from $420,680 to $970,800 in 2024.

Q4: Can I use gift funds for my down payment?
A: Yes, FHA allows 100% of the down payment to come from gift funds with proper documentation.

Q5: Are FHA rates higher than conventional?
A: FHA rates are often comparable or slightly lower, but the added mortgage insurance makes the overall cost higher.