Who pays for the FHA mortgage insurance and for how long?
The cost of the mortgage insurance is passed along to the borrower. The amount of the premium is included in the borrower’s monthly mortgage payment. In most cases, the insurance cost drops off after five years or when the remaining balance on the loan is 78 percent of the value of the property — whichever is longer. This is potentially important to anyone interested in buying a HUD home foreclosure, since like in any real estate transaction the buyer must at some point arrange for financing. Buyers of HUD homes can pay cash if they want, or they have the full spectrum of loan options available to them — even possibly an FHA insured loan.
