How to Remove FHA Mortgage Insurance
I had always thought FHA mortgage loans had mortgage insurance premiums for the life of the loan, but there is a loophole --- read and see if you are eligible. GREAT post by Rebekah, and if you should need to refinance or get a loan, she is GREAT.
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If you are a homeowner with an FHA loan then you are undoubtedly paying monthly mortgage insurance.
The mortgage insurance premium (MIP) you pay on an FHA loan insures your lender against default.
FHA mortgage insurance is a requirement for the majority of loans unless you meet the following criteria.
Any FHA loan closed prior to January 1, 2001 is not qualified for elimination of the monthly mortgage insurance premium unless it meets these requirements:
- More than 15-year term
- You are required to pay for 5 years or
- 78% Loan-to-value based on original purchase price
- 15-Year Term or less
- If your original loan amount was less than 90.01% or more of the initial appraised value, the mortgage insurance (MIP) will be terminated at 78% of the loan to value.
- You are not required to meet the 5-year minimum payment
- If your original loan amount is 90% or less, of the original appraisal value, NO monthly MIP will be charged.
An important note to remember on an FHA purchase is that your mortgage insurance is based on the amount you borrowed in comparison to your purchase price or the appraised value, whichever is lower. If you are refinancing; your FHA mortgage insurance premium is based on your appraised value.
If you are a first time home buyer or interested in refinancing your FHA loan, call us today. Your first step is pre-approval so you can confidently write an offer or understand your refinance benefits on a Colorado Springs home.
How to Remove FHA Mortgage Insurance was written by Rebekah Radice.
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T: 719.387.1368 | Email: rebekah@rebekahradice.com | Website: http://rebekahradice.com |CO & NMLS Licensee: LMB100010938 & 288596 | Benchmark Mortgage dba Ark-La-Tek Financial Services, LLC | 12 E. Kiowa |Colorado Springs, CO 80903
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