HELP! How do you determine if a TIL is correct on an FHA loan with monthly declining MIP? I recalculated the APR using APRWIN and taking the midpoint/average of payments in the range of payments disclosed. However, how do I recalculate the disclosed range of payments?

Example:
Loan Amt w/ upfront MIP = 108,199
Interest rate = 5.57
APR = 6.2988
Amount Financed = 105,238.30
Finance Charge = 127,782.09
P&I = 619.10
Monthly MIP = 44.15
The payment schedule shows 12 payments of 663.25, 347 payments ranging from 662.64 to 620.72, and 1 payment of 622.71.

Also, Richard had said in an earlier post that HUD volunteered to provide the same consumer benefit afforded by the HPA for non-govies. So, does the insurance terminate at 78%?

I can't figure out how the software got the range 662.64 - 620.72.

You have to know the MIP calculation formula to calculate the payment streams. The monthly FHA MIP amount changes on the anniversary date of the loan every year, based on the loan amount and LTV of the loan. If I remember correctly, the FHA seller-servicer manual has the calculation formula included somewhere.

Thanks - I'll try to get my hands on one.

Wendy,
It is my understanding that you should assume MIP ends when the amortization of the base loan amount reaches 78%.

I have a spreadsheet that calculates an amortization schedule for an FHA loan. I don't have enough information from your example to recalculate your numbers. (I'd need the upfront MIP and the appraised value.) But, I would say it is not dropping MIP at any point since the final payment is more than P&I.

Jill,
Does the spreadsheet calculate the payment schedule? If so, would you be able to share it with me? I've contacted every agency I could think of and can't get anything but - "that's not our area"

The upfront MIP is 1,599 and appraised value is 110,000

Wendy,
PM me your email address and I'll be glad to share my spreadsheet with you. It's been a while since I created this or since I've used it, so I don't remember how all I came up with it.

I do remember that the calculation is pretty complicated though, since both the declining MIP and the point at which MIP drops off are based on the base loan amount, while the P&I is based on the total loan amount. But the spreasheet should be simple enough to use.