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.
Senior Loan Officer
phone: (502) 905-3708
Fax: (502) 327-9119
Company ID #1364 | MB73346