FHA Mortgage Insurance - Mortgage insurance for FHA loans include (2) categories of insurance which currently applies to all FHA loans - UFMIP (Upfront Mortgage Insurance Premium) and Mortgage Insurance Premium (MIP). MIP is based on an annual premium and your payment to your mortgage servicer will include the MIP payment, expressed in a monthly payment inclusion to your monthly house payment. UFMIP is 1.75% of the Loan Amount after deducting the downpayment from the purchase price. The minimum downpayment is 3.5% for FHA, unless you're utilizing a down payment assistance (DPA) program. If you're able to use a DPA program your obligation for down payment and closing costs will vary but the UFMIP and monthly mortgage insurance will still apply. Below is the current MIP tables as of 2023.
Example: $200,000 purchase price, 3.5% ($7,000) down payment = $193,000 base loan amount. Add the UFMIP of 1.75% of $193,000 and your true financed loan amount would be $196,378 ($193,000 + [$193,000 * 0.0175]).