Thursday, March 6, 2014

Removing Mortgage Insurance on a FHA loan.

How Long Do You Pay Mortgage Insurance on an FHA Loan?

 FHA will require that you have 22 percent equity in your home to drop the

monthly MIP. The loan must be paid down to 78 percent of the original

balance, but you can pay extra against your principal balance to help

expedite this. FHA requires a full five years of monthly payments be paid,

so monitor your prepayments. If your purchase price is $100,000, you must

have a balance of $78,000 or less.

If your purchase price is $100,000, and you choose to use a minimum down

payment, which is 3.5 percent for FHA, you will pay $3,500 as a down

payment, and the base loan amount would be $96,500. . Your loan must be

current at the time it reaches 78 percent and, for FHA, a five year payment

history must be paid for your lender to drop off the monthly MIP amount.

Unlike conventional lending, FHA will not allow an appraisal to be done on

your property for the purpose of dropping off the MIP.

Joel Lobb

Senior  Loan Officer


  phone: (502) 905-3708

 Fax:     (502) 327-9119

  Company ID #1364 | MB73346