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Not all home loan transactions involve the same expenses, and depending on the lender, you may find certain companies may omit or consolidate certain costs, or that the costs are labeled differently but have the same or similar expectations.

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January 28, 2020
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FHA.com is a privately owned website, is not a government agency, and does not make loans.

FHA Loans and Your Monthly Mortgage Payment

January 1, 2020

In a recent article we discussed the use of FHA mortgage calculators and the importance of determining how much your monthly mortgage payment may be.

As discussed in the previous article, that’s an important factor to consider in the earliest stages of your planning, and partly because of the detail involved. Not all home loan transactions involve the same expenses, and depending on the lender, you may find certain companies may omit or consolidate certain costs, or that the costs are labeled differently but have the same or similar expectations.

Some people don’t realize this requires more information than just the amount of the loan and the interest rate multiplied by the number of months you’ll pay on the mortgage note.

We can direct you to online mortgage calculators, but you’ll need to include other details such as the projected amount of any hazard insurance, mortgage insurance premiums, and add-ons to the loan amount you may consider financing such as your Up Front Mortgage Insurance Premium or the addition of a VA Energy Efficient Mortgage package.

The FHA single family home loan handbook, also known as HUD 4000.1, offers a list to help you calculate your mortgage payment. They include the following:
 
  • Principal
  • Interest rate
  • Real estate taxes
  • Hazard insurance
  • MIP
  • Homeowner Association / condominium association fees or expenses
  • Ground rent (where applicable)
  • Any required special assessments
  • Payments for secondary financing (where applicable)

If you include add-ons, depending on the number of them you may find the mortgage payment going higher than you can afford. Compare the cost of paying up front for certain expenses rather than including them in the loan amount and see how that affects your monthly payments.

You can get a realistic estimate for your monthly FHA mortgage loan or refinance loan payments if you make your calculations with all the information available. Even if it’s simply an estimate, you will want to know what to expect.

You may encounter unexpected costs associated with your new home loan; if you have an appraisal, for example, that requires corrections or repairs, the cost of the follow-up inspection or compliance inspection may be something that needs to be added to the cost of your loan.

But some of the costs of your loan are one-time expenses; consider saving a bit more than you planned to originally just in case such expenses are a factor in closing your loan.

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