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FHA Calculator Precise Loan Planning by MyPerfectMortgage

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An FHA loan calculator can give you a good idea of what your payment will be when you buy a home with an FHA loan.

Definitions for the results above.

Monthly Payment: Your full estimated payment including estimated property taxes, homeowner’s insurance, and FHA mortgage insurance. Keep in mind that this figure will vary based on your costs. 

Principal and Interest: The portion of the payment that goes toward paying down your loan balance and the interest charged.

Tax and Insurance: Estimated property taxes and homeowner’s insurance, plus FHA’s monthly mortgage insurance fee. Mortgage insurance is typically 0.55% per year, paid in monthly installments. The fee is around $46 per month per $100,000 in loan amount.

FHA mortgage eligibility basics

FHA loans are one of the most popular programs for first-time buyers. Repeat buyers can use them too.

They are lenient on credit scores, work history, and down payment. FHA loans have made millions of people homeowners who could not have qualified otherwise.

Here’s how to get your FHA loan.

Down payment and credit score requirements

FHA loans require a minimum 3.5% down. 

This is lower than you need on most conventional loans. While conventional loans offer 3% down loans, mortgage insurance can be high and they come with restrictions. 

Credit score requirements for FHA loans are also more relaxed than for conventional loans, starting at just 580. Some lenders, though, may require 600-620.

Some borrowers with a credit score between 500-579 can be approved if they have a 10% down payment.

Debt payment history

Your credit report will show the lender your history of paying debt payments. 

But if you don’t have a traditional credit report, FHA allows things like rent payment history and utility payments to prove creditworthiness. This is called non-traditional credit.

Get started on your FHA loan.

Employment history

Evidence of recent and steady employment is integral to the approval process. Lenders want to see that you’ve been in the same line of work for two years. It’s okay to move jobs during that time, but you generally don’t want to switch careers or professions if you plan to buy a home in the next few years.

Related college counts toward your two-year minimum work history requirement. Employment gaps due to military service and child rearing are acceptable, as are some gaps for seasonal employment.

Front and back-end ratios

The front-end ratio is another way lenders can check if the borrower can make repayments. This ratio compares your gross income to a monthly payment (the sum of your mortgage payment, mortgage insurance, property taxes, and homeowners insurance). 

This is where FHA really shines. Someone with compensating factors can be approved for a loan with over 50% of their income going toward debts and future housing payment.

Learn more about FHA loans.

FHA MIP for 2023

FHA MIP is an acronym for mortgage insurance premium, an additional fee that is added to protect the lender's interests in case of default on an FHA loan. 

There are two MIPs an FHA loan borrower must pay: a single upfront MIP at closing and an ongoing monthly MIP.

Upfront MIP

The upfront MIP payment would equal 1.75% of the loan's value. So, for example, if you borrow $200,000 for a mortgage, the upfront payment would be $3,500.  

This payment is due at closing but often can be rolled into the loan itself. 

Monthly MIP

For most FHA borrowers, monthly MIP will be 0.55% of the loan amount per year, paid in 1/12 installments with the mortgage payment each month. A $300,000 FHA loan would require $138 per month in MIP. Monthly MIP is factored into the FHA loan calculator above.

FHA loan limits 2023

Federal Housing Administration loans set limits on how much a borrower can borrow. 

The nationwide FHA loan limit for a 1-unit property is $472,030, but as high as $1,089,300 in high-cost areas. Higher limits apply for 2-, 3-, and 4-unit properties.

FHA loan calculator—the bottom line

FHA loans are more suited for low and moderate-income borrowers, particularly those with a limited amount of cash saved for their down payment. Yet, there are no income limits for the program. 

An FHA loan can provide a path to homeownership for homebuyers who can’t qualify for a conventional loan due to credit, income, employment, or another factor.

Millions have become homeowners using FHA. See if you can do it too.

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Become a homeowner with an FHA loan.