How to get Rid of your Mortgage Insurance

For FHA loans endorsed prior to June 3, 2013, the MIP cancellation terms are as follows:

  • 30-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value and annual MIP has been paid for at least 60 months.
  • 15-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value. There is no requirement for MIP to be paid for at least 60 months.

Note that the loan-to-value calculation is not based on the current appraised value of the home; it’s based on the FHA’s last known value of the home. In many situations, the last known value is the home’s purchase price.

Using these rules, homeowners with a 30-year fixed rate FHA mortgage must pay mortgage insurance for at least five years before it can go away. Homeowners with a 15-year fixed-rate FHA mortgage can have MIP removed as soon as LTV drops to 78%.

 

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About SanDiegoatHomeTeam
Christian van't Vlie and Ivana Milosevic. Helping sellers and buyers successfully reach their real estate goals while keeping them informed every step of the way, disclosing all known facts and real estate practice procedures so that all involved parties can make well-informed decision. We care and we are at your service.

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