If you have a conventional mortgage, and put less than 20% down when you purchased your home ( or less than 20% equity when you refinanced your home ) your monthly payment includes "mortgage insurance".
Depending on your interest rate, for a 30- year term mortgage and if you put 5% down payment, it will take approximately 11 years to reach 78% loan to value; with 10% down, it will take you about 9 years, and with 15% down, 6 years.
If you haev an FHA mortgage, mortage insurance is automatically included in your monthly payment.
Both types of loans have certain rules where mortgage insurance must be eliminated after a certain period of time - and under certain conditions.
Dropping Conventiona Mortgage Insurance Rules:
Automatically Deleted When: 
- Mortgage balance is reduced to 78% LTV
- LTV based upon ORIGINAL VALUE
- Based SOLEY on regualr amortization ( not prepayment of principal )
- Mortgage payment must be current
You Request Mortgage Insurance be Deleted
- Mortgage balance is reduced to 78% LTV
- Submit cancellation request in writing
- Good payment history
- Current on mortgage payments
- Appraisal or Certification that property value has not decreased BELOW the original value
- No 2nd liens or subordinated loans on property
Dropping FHA Mortgage Insurance Premium Rules
If your loan closed PRIOR to January 1, 2001 you are NOT eligible for termination of MIP ( monthly mortgage insurance premium ) if closed on January 1,2001 and after, MIP will automatically terminate under the following conditions.
More than 15-year term
- Must pay for 5 years AND
- 78% LTV based on original LTV
15- Year Term or less
- if original loan amount is 90.01% or more, of the original appraised value, MIP will be terminated at 78%
- 5-year minimum payment waived
- if original loan amount is 90% or less, or the original appraisal value, NO monthly MIP was charged
SPEACIAL NOTE:
Loan to Value for purchases based on the lower of the sales price or appraised value
Loan to value for refiancnes abed on appraisal value
Loan to value figured on base loan amount WITHOUT the upfront mortgage insurance for FHA loans
Comments(0)