i was told that if you are a so called "risk" they do...but isnt the loan insured already by the gov't?

Pretty much any loan where you are putting down less than 20% of the purchase price will require PMI.

That depends on how much you have down. The larger the down payment, the less chance you will have to have PMI. If you do have to have it, after a certain amount of time and many payments later, you can drop it from your loan.

All FHA loans require PMI regardless if you put 20% down or not. You will pay an upfront MI which will roll into your loan and also a monthly MI. You would take your loan amount times .50% and divide by 12 to figure out your monthly. The MI on FHA loans is always the same and is less then conventional MI.

No the loan is not "by the gov." It is insured by the government.































The PMI is the mortgage insurance policy that you buy to guarantee your loan in the event of a foreclosure.































Lenders require PMI when the down payment is less than 20%.































But for 2007 the PMI premium is deductible for income tax purposes.































Best of luck,

All FHA loans require PMI, and unlike a conventional loan you will be required to pay PMI on this loan for life. The government ensures the loan will be paid to the bank that provides you with the money and the insurance pays for the protion that the government will subsidize. Conventional loans allow you to get rid of PMI after you have reached a 78% Loan to Value, which you will need an appraisal to prove the LTV to get out of paying the extra insureance. When considering the FHA loan option, be sure to take into consideration that you are getting a government sponsored loan and insured by you. Because of this, the ability to get into an FHA loan is easier for credit challenged borrowers as long as you have a good income and steady job history for the past 2 years. I always recommend the FHA program to my first time buyer clients that either don't have enough money to put down a payment of 20% or those that are credit challenged. You should always take into consideration that the PMI is now tax deductible if you make less than 100k per year and generally 40% less likely to go into foreclosure due to non-payment. If you get a sub-prime loan or even a conventional combo loan, the odds are against you and many times people fall into higher payments when the loans adjust.