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No the MIP doesn't go away when you pay down early to 78%. If that was the case , most people that would go with 20% down would go with FHA to get a lower rate then pay off an extra 2% of principal and not have MI.
There is a minimum amount of time which you need to pay for the PMI and you can't be late for a certain amount of time prior to trying to get it removed early. To be honest, I haven't worked with anyone who actually got MI removed off of a FHA loan ,the just refinanced into a conventional.
When you got a new loan, the PMI clock starts over. The term of your PMI are based on the rules of 2013 and not of jan 2011, it is a new loan. If you streamlined again, you might have MI for much longer time than 5 years.
The MIP starts over at the time of your refi because it's a new loan. And if you refi'd in May '13, you would have lifetime MIP no matter the equity, so you're lucky you did it sooner.
The MIP starts over at the time of your refi because it's a new loan. And if you refi'd in May '13, you would have lifetime MIP no matter the equity, so you're lucky you did it sooner.
A friend was talking about this and said the cut off was June 3, 2013 - is that correct?
As of June 3, 2013, however, most FHA loans will again require mortgage insurance for the life of the loan. In a recent letter, HUD informed all lenders offering FHA loans that the automatic cancellation of mortgage insurance premiums will be rescinded and that any mortgage greater than 90 loan-to-value at time of origination (the overwhelming majority) would require mortgage insurance for the life of the loan.
In a recent letter, HUD informed all lenders offering FHA loans that the automatic cancellation of mortgage insurance premiums will be rescinded and that any mortgage greater than 90 loan-to-value at time of origination (the overwhelming majority) would require mortgage insurance for the life of the loan.[/i]
FHA no longer will drop mortgage insurance premiums - Tom Kelly: Real Estate Today - [/url]
Winner
Funny how the title of the article doesn't match content. The title says "Will no Longer Drop" but goes on and says that it can be dropped.
Quote:
Originally Posted by FalconheadWest
The MIP starts over at the time of your refi because it's a new loan. And if you refi'd in May '13, you would have lifetime MIP no matter the equity, so you're lucky you did it sooner.
Normally I leave these MIP questions alone but when the reviver of this thread expressed the ability to take his loan below 80%, they clearly have the ability to take the loan below 90%. Whether of not it makes sense for them to stick with a FHA and MIP for 11 years is another question.
Quote:
Originally Posted by Elke Mariotti
Yes, FalconHead is correct. FHA loans now have lifetime of loan MI
The only way to get around that is to refinance with a conventional mortgage.
I've seen people repeating this on C-D even ones that advertise themselves as lender, "I'm a lender from Texas and ..." No surprise they only have a handful of post and most saying "I'm a lender"
While it is possible to get rid of the MIP with a higher initial down payment, that information is not spreading and buyers are not being educated that after 11 years, they'd have a pretty low interest rate. This information goes out lender, but lenders aren't the active bloggers and marketers like RE agents, so the information sits in a black hole.
Normally I leave these MIP questions alone but when the reviver of this thread expressed the ability to take his loan below 80%, they clearly have the ability to take the loan below 90%. Whether of not it makes sense for them to stick with a FHA and MIP for 11 years is another question.
While it is possible to get rid of the MIP with a higher initial down payment, that information is not spreading and buyers are not being educated that after 11 years, they'd have a pretty low interest rate. This information goes out lender, but lenders aren't the active bloggers and marketers like RE agents, so the information sits in a black hole.
What you're saying doesn't make sense. The link posted specifically states the "original" mortgage value. It doesn't matter if someone can bring their loan below 90% or 80%, if it didn't start below 90%, it's a lifetime MIP (and yes, it started in June, not May like I put - I put May because I just kept remembering to remind people to get their loan or refi by the end of May).
And, for the vast majority of buyers, they are only putting down the minimum 3.5%, so the statement of lifetime MIP does apply to the masses. It's an extremely small percentage, like probably under 5%, who put more than the minimum down. If people had more, they would opt for the conventional route for lesser fees.
What you're saying doesn't make sense. The link posted specifically states the "original" mortgage value. It doesn't matter if someone can bring their loan below 90% or 80%, if it didn't start below 90%, it's a lifetime MIP (and yes, it started in June, not May like I put - I put May because I just kept remembering to remind people to get their loan or refi by the end of May).
And, for the vast majority of buyers, they are only putting down the minimum 3.5%, so the statement of lifetime MIP does apply to the masses. It's an extremely small percentage, like probably under 5%, who put more than the minimum down. If people had more, they would opt for the conventional route for lesser fees.
Okay so here's a question: If I remember correctly, mortgage rates were really low in May, like 3.5%. If an FHA loan originated in May at 3.5%, could they pay down to 80% over the required five year MIP and drop the MIP in the sixth year while maintaining the 3.5% interest rate? Not a refi, but just paying down to 80% so the mortgage has 25 years remaining at 3.5% interest but no longer have the MIP?
I believe you have to pay down to 78% for them to consider dropping the MIP at the 5 year mark. But, yes, you would keep your 3.5% rate. That is fixed, unless you signed an ARM and not a fixed rate. Your rate will never change unless you pay that loan off and get a new loan. What you signed is what is agreed to, by all parties.
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