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Can someone who's an expert at this answer my question.
I am doing a 30 year FHA loan for my mortgage. I had my friend and a realtor tell me that at once you pay 22% into your mortgage at anytime regardless if its 2 years or 6 years, you are no longer required to pay the mortgage insurance monthly payment.
Then my lender told me that even if it takes you only 3 years to pay 22% into your mortgage, that mortgage insurance monthly payment does not go away until a minimum of 5 years?
I was comparing the pros and cons of Conventional vs FHA and I believe your lender is right. You have the right to ask for the cancellation of mortgage insurance when your loan hits 78% or 5 years, whichever comes LAST. Ask for this information in writing.
...Then my lender told me that even if it takes you only 3 years to pay 22% into your mortgage, that mortgage insurance monthly payment does not go away until a minimum of 5 years?
FHA's monthly mortgage insurance payments will be automatically terminated when these conditions occur:
For mortgages with terms 15 years and less and with Loan to Value ratios 90 percent and greater, annual premiums will be canceled when the Loan to Value ratio reaches 78 percent regardless of the amount of time the mortgagor has paid the premiums.
For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the Loan to Value ratio reaches 78 percent, provided the mortgagor has paid the annual premium for at least 5 years.
Mortgages with terms 15 years and less and with loan to value ratios of 89.99 percent and less will not be charged annual mortgage insurance premiums.
I financed through an FHA loan, then re-fi'd a year later conventional. Got rid of that pesky PMI.
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