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Eliminating Mortgage Insurance -It’s Like Getting A Pay Raise
Eliminating MIP (see below) is like getting a raise – well, sort of …it’s money that you didn’t have before and isn’t that great? What does it take? It takes for you to be pro-active and to check on a few facts to see if you qualify for the MIP elimination and then you’ll need to know what to do. That could get you an extra $1,800 to $2,500 a year (or even more, depending on your loan )
What is MIP? FHA (Federal Housing Administration) loans require mortgage insurance premium to cover a possible loss to the lender if the property has to be foreclosed and sold. The premium is substantial and eliminating the MIP would reduce the payment considerably.
The MIP must remain in effect for five years but after that, when the balance is 78% of the original purchase price, FHA will release the requirement and your monthly payment will go down. Since amortization is affected by interest rates, the normal time to reach this 78% point could be from 9 to 12 years at today’s interest rates.
What should I do next? Check following items:
How long have you had your loan? Is it older than ... more
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