Does FHA Mortgage Insurance Go Away? That is the question!
Flower Mound and Frisco FHA home buyers and refinance prospects have many times wondered about this topic. To answer that straight out, YES, your mortgage insurance premium monthly will go away.
Mortgage Insurance falls off or goes away, depending on some different variables: Loan to value, loan term (30yr, 20yr, 15yr). In a previous post, I labeled it just perfect,
For FHA loans of 15yr terms or more, you must have an LTV of 78% or you could say that you have 22% equity, before your MIP will go away. On the contrary, if your LTV reaches this point before you have been in the loan 5 years, then you have to wait until you have had the loan for 5 years. If you have an FHA loan that is 15yrs or less, the MIP falls off when the LTV is 78% and no time in the loan is required.
The Federal Housing Administration, or as you probably know it, FHA, determines when your loan is at 78%. They will use the lesser of the sales price or loan amount from the time that you bought the home. If you feel like you have reached this point, it would be best for you to contact FHA directly and bring it to their attention and request that your MIP, or Mortgage Insurance premium be removed.
Important final note about this subject. In a 30yr FHA mortgage, you must have your loan for at least 5 years regarless of your loan to value, before you MIP can fall off. If you have a 15yr mortgage, there is no time of seasoning required before you can drop the MIP, and it is solely determined by the aforementioned details.
If you are looking to buy a home or refinance, and you think that FHA is the way for you, please contact your Flower Mound Mortgage or Frisco Mortgage consultant. Our rates and fees are some of the best in the market.
Other helpful FHA Links:
Most Recent FHA Changes, FHA Seller Contribution